Paulo Teixeira Pinto, president of Portuguese financial group Millennium BCP, told Kathimerini about his group’s ambitious expansion plans into the Greek market. Teixeira Pinto, in Athens on the occasion of the renaming of local subsidiary NovaBank into Millennium Bank, says the plan is for Millennium Bank to reinforce its position in the market through organic growth. The ultimate target is for the bank to become one of Greece’s top five. Of great interest is Teixeira Pinto’s view of the European banking system. He forecasts that cross-border bank mergers will become much more common over the next few years, leading to fewer but bigger banks in the European Union. He notes that only Greek groups with successful activity abroad will survive. However, he says, a primary condition for such a success abroad is to have achieved the biggest possible market share at home. A small fish in the domestic market cannot have international ambitions, the Millennium group chief says. It has been said that competition among Greek banks is not satisfactory. What is your view after six years of presence in the Greek market? I believe the banking sector in Greece is among the most competitive in Europe. The reason we decided to expand into Greece was not the limited competition but the market’s prospects. We saw the Greek market was very similar to Portugal’s and that was a plus for us. The two countries are roughly equal in population and size of the economy. Regarding competition, however, the situation was entirely different. When we started building our group in Portugal 20 years ago, state-owned banks dominated and we were among the first privately owned banks. By contrast, when we became active in Greece, in 2000, there were large private banks and competition was intense. This did not mean there was no space for an innovative presence that would benefit the Greek consumer. This was our target. NovaBank, now Millennium, is expanding fast, yet its market share is still low. Given that you want to boost your presence, are you considering any acquisitions? We are very happy to be in Greece and our strategic priority is to strengthen our presence. The Greek market is a key one to our plans. We are very satisfied with NovaBank’s penetration and the results it has achieved in a few years’ time. This does not mean that we are satisfied by our market share. We want to increase our size through organic growth. Of course, we can exclude nothing and if acquisitions opportunities arise, we will look at them. I must stress, however, that we are not actively looking for banks to buy; it is not part of our plans. Nonetheless, we intend to increase our size significantly. Our goal is to become one of Greece’s top five banks by 2008. Does the Millennium group have plans to expand in other countries? The Romanian market is very important for our international plans and is the final frontier in our international expansion. Our goal from now on is to boost our presence in markets we are already active in. In Europe, we are present in Portugal, Poland, Greece, Turkey and, from early 2007, in Romania. Outside Europe, we are present in Angola, Mozambique and the United States. In previous years we expanded into markets such as Greece, but we also sold our activities in markets we believed were not of great interest to us, such as Canada, Luxembourg, Macau and France. Our moves are over and our big challenge now is profitable growth. Is the Millennium group’s long-term goal to become a single bank or will you keep local banks in each country? We will have a bank in each country as a separate legal entity. But the group will deal with the client as a single entity, irrespective of whether he or she resides in Greece, Turkey, Angola or the US. This concerns our individual clients because it has already taken place in corporate banking. We have a common platform to serve our corporate clients. This, however, does not mean access everywhere, across electronic systems. Our Greek clients will not have the same access in ATMs in Portugal or Poland as in Greece. This cannot be achieved, for the time being, because of legal restrictions. However, the Millennium group client will enjoy the same quality of services in all countries. There are initiatives at EU level to create a single banking market. How will the sector change in the coming years? The European Union is making progress toward creating a single market. However, I believe the EU remains a goal, an idea rather than a reality. We are still far from treating it as a single market and as a political entity. However, the banking environment is rapidly transformed by market forces. The concentration of forces in Europe, through mergers, will accelerate over the coming years. In my opinion, mergers will be cross-border, such as between Italy’s Unicredito and Germany’s HVB Group. I am sure such moves will multiply in the future. How do you go about achieving your goals? What are the critical points? First, you must focus on profitable activities. That is why we radically altered our geographic presence to focus on the most profitable markets. Only if you can have significant revenue from abroad can you hope to influence developments. However, a necessary condition to successfully expand abroad is to have achieved your maximum size domestically.