Taking advantage of their geographical proximity and knowledge of the region, Greek banks have found a fertile backyard for expansion into the Balkans over the past decade, a trend likely to intensify with the EU entry of Bulgaria and Romania. Recently hailed by the Bank of Greece as a «particularly important» factor in the country’s economy, the activity of Greek banks in Southeastern Europe has steadily intensified. In 2005, Greek banks had 18 subsidiaries in the region and a network of branches employing some 15,000 people, a threefold increase from the start of the decade, Bank of Greece figures showed. «The markets of Bulgaria, Romania, Serbia and Turkey are in full growth, but bank markets there are still weak,» said Vassilis Panayiotidis, a senior economist at the Union of Greek Banks. »There are important prospects (for investment), particularly with the current privatization trends in those countries,» he told AFP. Overall, Greek companies have invested 14 billion euros in Balkan countries in fields including telecommunications, the food and cement industries and financial credit services, Greek Foreign Minister Dora Bakoyannis recently told the British-Hellenic Chamber of Commerce. More than 1,200 Balkan bank branches are in Greek hands, constituting a market share of over 20 percent, Bakoyannis added. Not only are Greeks «historically» well-acquainted with the broader Balkan region but their interest has been sharpened further by the scheduled entry of Bulgaria and Romania into the European Union as of January 1, Panayiotidis explained. «Greek banks have attained sufficient growth at home, their expansion abroad is now a matter of strategic importance,» he said. The focus in 2006 fell on Turkey, where Greek banks concluded the purchase of two lenders at a cost of 2.5 billion euros. The bulk of that money, 2.3 billion euros (2.95 billion dollars), was spent last April by the National Bank of Greece (NBG) in acquiring Finansbank, Turkey’s eighth-largest. Five months later, NBG also took over Serbia’s Vojvodanska Banka to further boost its holdings, which currently include a network of over 1,300 branches, more than 11 million clients and assets in excess of 70 billion euros. More than half of NBG’s branches are now located outside Greece. Greece’s second-largest bank, Alpha, expects to have 267 branches of its own in the region, compared to 176 last year. The country’s third group, EFG Eurobank, this year took over three-quarters of Bulgarian bank DZI, in addition to Ukraine’s Universal Bank and Tekfenbank of Turkey. Eurobank expects to have investments worth 1 billion euros in Bulgaria, Romania, Serbia, Poland, Ukraine and Turkey, along with a network of 700 branches and 10,000 employees. The expansion of Greek banks has attracted attention from foreign investors, who have moved to reinforce their own holdings in Greece. Foreign investors currently control 45 percent of NBG, 34 percent of Alpha Bank and 23 percent of Eurobank.