ECONOMY

Bank merger will not stop EFG Eurobank from ‘going it alone’

Greece’s biggest bank merger will not change EFG Eurobank’s policy to pursue go-it-alone organic growth and could even open up fresh competitive opportunities, its chief executive said yesterday. The group’s organic growth remains the main pillar of our policy, EFG Eurobank-Ergasias Chief Executive Nicholas Nanopoulos told Reuters, saying the merger between National Bank and Alpha would not drive it into merger talks. The combination of National Bank with Alpha, Greece’s two largest banks, will dominate the local market with a market share of more than 50 percent in loans and deposits. The 10-billion-euro ($8.85-billion) all-share deal was announced on November 1. But rival bankers say the task of merging their activities will be challenging, requiring the banks to deal with integration costs and a significant overlap in activities. The merger of National Bank with Alpha will open up opportunities for all remaining players to go after market share, Nanopoulos said. Soon after the announcement of the National-Alpha merger, rumors swept the Athens bourse that more deals were imminent among the sector’s other players as the banking system consolidates. EFG Eurobank has already responded to market speculation with a formal denial that it was about to link up with Commercial Bank. Nanopoulos said the bank was focused on internal improvements. Our effort for better and cheaper services for our clients, corporate and retail, will continue and intensify to deliver improved results for our shareholders, Nanopoulos said. One year after merging with Ergobank, the EFG Eurobank-Ergasias group, in which Germany’s Deutsche Bank owns 10 percent, reported on Thursday 6.4 percent growth in net profits after minorities to 173 million euros for the nine months to September. The group, with a market value of 4.7 billion euros, managed strong growth in business volumes, with loans growing 24 percent to 9.9 billion euros and deposits increasing 27 percent to 15.5 billion. Anyway you look at it, interest rates in 2002 will be low and attractive. Three years ago Greece had double-digit rates, we haven’t felt the full impact (of the reductions) yet, Nanopoulos said, forecasting continuing growth in consumer lending and mortgages. He said Greek borrowing levels remain low, trailing significantly other eurozone countries like Portugal and Spain in terms of bank loans as a percentage of GDP. Greece’s loans-to-GDP ratio of 40 percent is about one third of the European average of 120 percent, leaving plenty of room for growth. We are well positioned to take advantage of this, Nanopoulos said.