Further mergers and acquisitions lie ahead in the domestic banking system, predicted the president of the National Bank of Greece (NBG) at yesterday’s annual general meeting of the country’s biggest credit institution. «I believe that if markets continue to develop normally, bank capitalizations in Europe that are below -35-40 billion will not guarantee high competitiveness and a leading presence in the future,» said Takis Arapoglou. Today the capitalization of NBG stands at -20 billion, while EFG Eurobank’s remains at -12 billion and Alpha Bank’s at -9.4 billion. The NBG head noted that until recently there had only been one bank, HSBC, with a capitalization of more than -100 billion. Recent moves show that after mergers and acquisitions there will be at least two new major groups with capitalization above -100 billion. After all, he said, if we look at other EU countries similar to Greece, they only have two or three banks which have captured more than 80 percent of the market. «In our country, the five major banks concentrate 70 percent of the market. Unless we become the exception, we should expect certain developments in this area at some point,» he stated. These mergers and acquisitions will aim at utilizing the economies of scale and cooperations between groups based in Greece. This will also result in the maintenance of high valuations for Greek banking stocks and the creation of even greater Greek banking groups in terms of size, meaning they will be able to compete on a better footing with more European banks than they do today. «The more the Greek market matures, the greater will be the need in the banking market for mergers and acquisitions, without anyone being able to predict who will merge with whom and when, just as it has happened or happens in the rest of Europe,» said Arapoglou. He particularly referred to the acquisitions and the expansion of the NBG group outside Greece, in Southeastern Europe and in Turkey, moves which expand the prospects of the group fover the next few years. As far as his management’s work in the last three years is concerned, he made special references to the average annual rise in revenues of more than 20 percent, to the pretax profits of -1.3 billion in 2006 with an average annual increase of more than 50 percent, to the quadrupling of the branch network in Southeast Europe through both its organic growth and the acquisitions, and to the sum of loans issued, which rose by an average annual rate of 31 percent, exceeding -44 billion in 2006.