Emporiki eyes 30 pct profit growth to 2011
Emporiki Bank, majority owned by France’s Credit Agricole, will seek to grow profits by 30 percent annually and become its parent’s spearhead in Southeast Europe, its chief executive said yesterday. Emporiki, Greece’s fifth-largest lender, was acquired by Agricole in 2006 and is being restructured by a new management team which unveiled the bank’s new 2007-11 business plan. «The new business plan will help Emporiki achieve its deserved place in the Greek market and Credit Agricole to expand in the Balkans,» Georges Pauget, Agricole’s chief executive, told reporters. Executives said Southeast European markets are expected to grow significantly, at double-digit rates, to close the gap with EU penetration levels while maintaining high margins, particularly in retail banking. The bank – currently present in Bulgaria, Romania, Albania and Cyprus with 45 branches – will grow organically in these countries, expanding its network outside Greece to 309 branches by 2011 and increasing its headcount by 2,250 people. In Greece, Emporiki expects the banking market to continue growing «in a dropping margins environment.» Retail lending, the main growth driver in the last five years, is seen as expanding at high but descending rates, executives said. Based on the plan, Emporiki is targeting annual pretax profit growth of 30 percent and earnings of at least -600 million ($816 million) by 2011. The bank posted a net loss of -234.7 million last year, hurt by loan-loss provisions. The bank wants to grow its market share from 9.0 to 10.5 percent by 2011 and squeeze its cost-to-income ratio to below 50 from 65 percent to match Greek rivals. Emporiki is targeting an annual 21 percent growth in mortgages, setting a 2011 goal of -14.3 billion. It will aim to expand consumer credit by 15 percent a year to -5.7 billion and small business loans by 13 percent to -9.9 billion. Its business plan projects the net interest margin in Greece will shrink to 2.8 percent by 2011 from 3.4 percent last year as price competition bites. On the liabilities side, Emporiki will aim to grow deposits by an annual 11 percent to -26.5 billion by 2011. Capital expenditure in the five-year period is projected at -250-300 million. Emporiki, with a current market value of -2.9 billion, trades at about 14 times estimated 2007 earnings. Its shares, down 4.9 percent so far this year, have underperformed the Greek market.
