ECONOMY

Eurobank CEO sees slower credit growth

EFG Eurobank could seek to undertake the management of Emporiki Bank, along with a substantial stake, if Credit Agricole, at present a minority shareholder, decides to pull out, Eurobank’s Chief Executive Officer Nikos Nanopoulos told reporters yesterday. «If such an issue arises, we will evaluate the situation and the terms and decide accordingly,» he said. He added, though, that he considered the acquisition of a further stake in Emporiki and the takeover of the bank’s management by Credit Agricole as the most likely development. Nanopoulos also forecast that credit expansion is due for a major slowdown over the following years. In 2006, he said, it will range between 20 and 25 percent, compared to 30 percent in 2005, and the expansion rate will further slow in subsequent years. He added that it would not be healthy for credit expansion to continue at the current pace. Asked about the repeated criticism leveled at banks over their «excessive» profits, Nanopoulos said that this year was not a typical one, since the adoption of International Financial Reporting Standards (IFRS) boosted many banks’ profits. Other banks also profited from the early retirement programs they implemented in 2004, which depressed that year’s results and boosted this year’s. Irrespective of these circumstances, Nanopoulos said that bank profitability should be welcomed because it strengthens their capital base and allows them to support the need of both households and enterprises for financing. «If the banking sector was weak, then we would have a multiplier effect leading to a great weakening of GDP growth,» he said, presenting the example of Japan and its economic stagnation for over a decade, caused to a large extent by the bad situation of its banking system, overburdened with bad loans. Eurobank’s Deputy CEO Byron Ballis focused on the need for changes in banks’ opening hours and referred to the inauguration of a Eurobank branch at The Mall Athens which stays open on Saturday’s as a currency exchange outlet. He said he was surprised by the virulent reaction from the bank employees’ federation (OTOE). «This is a commercial development with hundreds of outlets and 100,000 visitors (on Saturday). We had the agreement of our bank employees’ union and we hired new personnel. The opposition by some unionists is hard to understand,» he said.