ECONOMY

Piraeus Bank goes international

Piraeus Bank is set for further expansion outside Greece, eyeing higher profits from the Balkans and Egypt before retail banking growth peaks at home, its international business chief said yesterday. Greek banks, keen to secure new areas of growth and diversify revenues, have been making forays into the developing banking markets of Romania, Bulgaria, Serbia and Albania. «The contribution of international operations to group profit is about 14 percent, our goal is to raise it to more than 20 percent,» John Kyriakopoulos, head of international activities and wealth management, told Reuters in an interview. «Expansion of the group’s international network will come about through organic growth and acquisitions where we are already present or in new countries,» he said. Piraeus, Greece’s fifth-largest lender by assets and 4.2 percent owned by Dutch financial services group ING, has built a foothold in the Balkans, gobbling up small banks in the region. Now present in Romania and Bulgaria – set to join the EU in 2007 – as well as Albania, Serbia, Egypt, London and the United States, the group’s international network numbers 161 branches. With assets of 2.9 billion euros, foreign operations generate net earnings of 19 million euros. «Without acquisitions the bank’s international network will grow to 230 branches from 170 in December 2005,» Kyriakopoulos said. «Capital adequacy is sufficient to support this expansion. Our acquisitions are small and we’ll stay with this model.» European lenders are continuing to hunt for new sources of growth in eastern Europe, going after privatizations to build up their presence in the region, with Cypriot banks the latest to join the game. But some have begun to look in the broader Mediterranean. After acquiring Bulgaria’s Eurobank and Atlas Bank in Serbia, Piraeus is among the 11 bidders for Serbia’s Vojvodjanska Banka but the Greek lender also recently ventured into Egypt, buying out Egyptian Commercial Bank (ECB). Piraeus sees opportunities in Egypt’s banking system, where out of a population of 72 million there are only 7 to 8 million bank accounts and about 1.5 million credit cards, meaning there is considerable room for a wide range of products and services. Piraeus also plans to hold on to Marathon Bank in the US, unlike National Bank, which pulled out recently, selling its subsidiaries in New York and Canada. «Now that we’re the only Greek bank with a presence in the US it makes sense to grow a bit further. There are no plans to pull out,» Kyriakopoulos said. Piraeus is having a bumper year in Greece, with robust home and consumer lending fueling a 49 percent rise in net profit for the first nine months. «The retail business in Greece has another two to three years of growth, there is more room for penetration,» Kyriakopoulos said.