CA will not make new bid
Credit Agricole (CA) will not up its offer for the acquisition of Emporiki Bank following the bid by the Bank of Cyprus, says Jean-Frederic de Leusse, head of the French bank’s development department and member of its executive committee, in an interview with Kathimerini. CA is certain its cash offer for 100 percent of the Greek bank, paying 23.50 euros per share, is superior to that of the Bank of Cyprus. Will you respond to the Bank of Cyprus bid with a new or improved one? We have no reasons to pay too much for Emporiki. Credit Agricole is a listed company and must clearly explain everything to its shareholders before proceeding to any investment. We must justify the price we will offer. We effectively started buying shares in prices that are high for Greece. We have made our offer for more than a week. It follows the terms set by the government for the privatization of Emporiki: Transparency and equality among shareholders. We believe we have already offered a good price. It is also a matter for shareholders. They have to choose between a cash bid that we offer and the shares that the Bank of Cyprus offers. Let me remind you that one of the criteria for the privatization of Emporiki was that the offer should be in cash. Therefore shareholders have to choose between cash, shares and possibly a third choice that may emerge. This is an open process and our offer remains competitive. Since last Tuesday all rumors have resulted in major fluctuations of stocks and the decline of banking stocks between 5 and 7 percent, with Emporiki Bank showing capital gains of 7 percent compared with other banks. Is there any chance you may increase your offer price? Not at this stage. We have submitted a good offer. It is already very high. Emporiki is expensive compared with other Greek banks. A recent report by the Financial Times suggested that the French are right in trying to buy Emporiki, even though it is expensive. It does have great growth margins that we want to make the most of. Our data show that Emporiki has one of the lowest efficiency indices among banks and the highest price-per-earnings ratio. What will you do if your bid is not successful? Our bid is the best and we do not see why it may not be chosen. I do not think the Bank of Cyprus offer will be selected, although that is up to the shareholders. We are not interested in the Bank of Cyprus; we have not examined it and we have not decided to become its partner. We always want the choice of partners to be ours. We have decided to cooperate with the Greek government and Emporiki. If we do not succeed we will sell our holding at Emporiki, for cash only. Why do you want Emporiki? First, we have great trust in the Greek economy, which shows high growth rates and more mobility recently. We also believe in the Greek banking sector and we have built a relationship with Emporiki, being friends for six years. When we started this partnership we always paved the way for this development. What stopped us in the past was the social security problem of Emporiki and the cost of its solution, so we wanted a clear solution before moving to the next step. Emporiki is also present in Albania, Romania and Bulgaria, where we are not. Furthermore, along with Emporiki we have created very successful joint ventures, such as Credicom and Emporiki Life. Is Emporiki more expensive for you than being present independently in the neighboring countries? No. It is very hard to obtain a banking market share equal to Emporiki’s, reaching 8 percent. It takes plenty of money and 10 to 20 years of presence. It has a known name, its network and employees. Of course it does lag other banks and it will be difficult to modernize a state bank. Still, in the last two years we have made important modernization and progress moves, especially in the social security and cost maintenance issues. Now all Emporiki needs is a foreign partner. Are you thinking of changing the Emporiki management? We want a Greek bank with Greek management that sells Greek products. It will certainly be supported by Credit Agricole’s know-how. Our aim is to enter Emporiki in the global CA network; we already cooperate with five top banks in 65 countries. We do not want Emporiki to turn into a CA branch in Greece. It is too early for me to answer about the management. I only know the chairman, Giorgos Provopoulos, and two or three other high-level officials. This management has taken significant steps, but there is more to do. What are your investment and development plans for Emporiki? Our investment plan has the following five pillars, for which we will invest 50 million euros in three years. 1) Upgrade the information technology system, mainly those of the networks. 2) Apply a Customer Relationship Management (CRM) that will increase the bank’s efficiency. 3) Hire 250 new high-level staff, mainly to promote sales. Some 80 percent of the bank’s staff will be employed in sales, coming into contact with customers. 4) Offer early retirement to 500 employees. 5) Keep costs down and achieve funding synergies. What will be the bank’s main direction? Emporiki shall emphatically remain in retail banking and strengthen other domains, such as business banking, asset management, private banking, leasing and shipping. It may also cooperate with Calyon [a CA corporate and investment banking subsidiary] and emphasize on insurance and on bancassurance products. Are you thinking of delisting Emporiki? If we concentrate 90 percent of shares it cannot remain listed.