ECONOMY

Emporiki to solve pension fund issue

Emporiki Bank is very close to finding a solution to its employees’ pension fund deficit, clearing the way for Credit Agricole to raise its current stake, the bank’s chief executive said yesterday. «The process is going well and I think we will have an solution to the pension fund issue soon after the (March 7) election,» Yiannis Stournaras told Reuters. Stournaras also reiterated the bank’s longstanding forecast that its net profits will continue to rise by around 35 to 40 percent this year and next, in line with the 2003 performance, as the bank benefits from an expansion in retail banking and the adoption of the electronic banking system Pegasus. In October, a senior Finance Ministry official told Reuters the bank’s pension fund deficit was obstructing the government’s plans to sell more of the bank to Credit Agricole, which currently holds an 11 percent stake. Stournaras said the proposal presented to the unions in October called for the conversion of the employees’ supplementary pension fund from a scheme based on defined benefits to one based on defined contributions. The proposed conversion would erase the actuarial deficit – currently estimated at not more than 300 million euros – which would not show up on the bank’s balance sheet. Credit Agricole has right of first refusal for an additional 10 percent in Emporiki. The bank last month reported a 37.4 percent jump in 2003 group net profit after minorities to 71.8 million euros. It plans to re-evaluate the value of its real estate holdings, which would increase the bank’s own capital by 230 million euros, said Stournaras. The bank’s own capital is now about 1.2 billion euros. (Reuters)