ECONOMY

Eurobank aims at fast growth and higher dividend

The management of EFG Eurobank Ergasias, Greece’s second-largest privately owned bank and third-largest overall, aims at raising earnings per price by 20 percent annually for the period 2004-2005, the bank’s managing director, Nikos Nanopoulos, told the shareholders’ annual general meeting yesterday. Another «achievable» target, according to Nanopoulos, will be raising the dividend per share by at least 12 percent annually over the same period. In order to achieve both targets, the bank needs to raise its earnings by 14 percent annually and limit the costs/turnover ratio to below 53 percent for group activities and below 50 percent for domestic operations by the end of 2005. In 2003, the group’s consolidated earnings, before taxes and after minority rights, were 373 million euros, 37 percent higher than in 2002. After-tax profits were 273 million euros, a 39 percent increase. Yesterday’s AGM was attended by shareholders holding a combined 68.3 percent stake. The attendants approved a 2003 dividend of 0.60 euros per share, which, based on yesterday’s closing price of 17.52 euros, represents a yield of 3.42 percent. The distribution of the dividend, to holders of shares acquired until yesterday, will begin on Monday, April 19. Shareholders also approved the extension of a share buyback plan of up to 10 percent of its share capital at prices up to 27.09 euros a share for a 12-month period. Six million shares already bought through the plan will be canceled in order to shore up the price. The bank’s share capital will be reduced accordingly. Shares will be distributed to personnel for free; a stock option program was also approved. Nanopoulos told shareholders that the Greek economy is developing well but that continued high growth required faster structural reforms. He said the main economic priorities were still a «rationalized» role for the State: a revised tax code, a plan to boost competitiveness and more flexibility in the labor market. Nanopoulos also expressed his optimism for prospects of further business growth: He said that credit expansion in 2003, at a 17 percent pace, was at three times the speed of expansion in the European Union but that total household borrowing in Greece was still far below the EU average.