ECONOMY

Shareholders were aware of NBG’s ‘secret’ plan

National Bank of Greece (NBG) has been carrying out major restructuring moves in recent months. It has bought banks in Turkey and Serbia, and has submitted a bid for Romania’s major savings bank. It has also bought P&K Securities, one of the country’s major stockbrokerages, which will put it in the top spot there. On the other hand, it has sold its US subsidiary, Atlantic Bank, and shut down its branches in Paris, Frankfurt and Amsterdam. Such bold moves are rather unusual for NBG and have caused some uneasiness. The country’s biggest lender was under state control up until a few years ago and the market seems to have expected its management to remain unimaginative. The bank’s present CEO, Takis Arapoglou, has often said he aims to bolster its capitalization to about 20 billion euros, from 13 billion today, which would list it among Europe’s 20 biggest banks. Only then will NBG have an internationally «visible» profile, he argues. And it needs initiatives that boost profitability. But even arguments as eloquent as this are not convincing enough for the disbelievers. They believe Arapoglou is implementing a secret plan. Well, this paper has investigated and can confirm that, indeed, the secret plan does exist. And it includes everything. In Bulgaria, where NBG’s subsidiary has 110 branches, the target is an increase in turnover. In the Former Yugoslav Republic of Macedonia, Romania and Serbia the target is the expansion of present networks. As regards the strategic expansion plan, the same plan views investment in the US, Canada and Western Europe as not particularly promising and gives high priority to Romania. Indeed, it stresses «the optimum utilization of capital, mainly through acquisitions with priority in Romania, and the enhancement of opportunities in Turkey.» No business plan could be clearer, only industrial espionage could show a clearer picture. Regarding the P&K acquisition, the NBG plan acknowledges that the target is for the bank to acquire top market spot through higher sales to institutional investors, as well as in its mutual funds segment. The plan also envisages the marketing of products and services for people in the middle-income bracket, sale of the bank’s stake in cement firm Heracles, optimization of the network, involving the closure of about 90 branches, and the opening of 30-50 new ones in different locations. All this and much more is part of NBG’s business plan for 2005-2007. This is no secret plan; it was actually unveiled in March 2005 but then nobody believed that management meant to implement it. We suppose that Arapoglou is currently busy with paying the 3 billion euros recently raised for the acquisition of Turkey’s Finansbank. Those who contributed to the rights issue effectively approved the business plan and the acquisitions. They must have been people in the know…