NBG takes a sharp turn to the Balkans

The National Bank of Greece (NBG) has decided to shut a number of branches in Western Europe, bolster its network in the Balkans, increase its share in its subsidiary National Investment Company and issue hybrid loans totaling 400 million euros, as part of a rationalization plan and with a view to the optimization of return on equity. Confirming an earlier report by Kathimerini, the NBG board decided to close its branches in Paris, Frankfurt and Amsterdam, estimating that the move will save more than 11 million euros in operational expenses annually. NBG’s London branch is envisaged to pick up most of the business of the three branches being shut. In Romania, NBG plans to expand the 25-branch strong network of its Banca Romanesca subsidiary with 15 more in the first half of next year, mostly in Bucharest. In Serbia, the plan envisages a doubling of the number of branches to 30 within the next year. NBG’s Bulgarian subsidiary UBB plans to issue the first co-branded credit card in the country with OTE Telecom’s mobile telephony arm Globul. UBB has being growing impressively in retail banking, with a 100 percent rise in personal loans so far this year to a 15 percent market total, against 4 percent in 2001. Corporate lending is up 22.4 percent in the last 12 months. In the Former Yugoslav Republic of Macedonia (FYROM), NBG’s arm Stopanska Bank is the country’s largest, with 50 branches. It recently completed a rationalization of its portfolio and a modernization drive. Stopanska accounts for one in two new mortgage and consumer loans in FYROM, it has issued the first international credit card in the country, and it is also the first to launch modern «telemarketing» methods. In Albania, where NGB plans to expand its branch network by two to seven, its share in retail banking is about 11 percent and rising. Further, NBG tomorrow will buy back an agreed block of 9,898,000 shares of its subsidiary National Investment Subsidiary, representing a 10 percent interest, raising its total to 46.4 percent. Finally, an initial series of hybrid loans totaling 400 million euros will be issued to foreign investors. The issue has been made possible by a decision of the Bank of Greece which allows the raising of hybrid capital in bank’s basic supervisory financial instruments from 15 percent to 30 percent.

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