ECONOMY

New Europe main driver for Eurobank

The strong expansion of EFG Eurobank in the New European states appears to be the main driver behind the bank’s excellent growth prospects, with officials estimating that loans by foreign subsidiaries in 2008 will exceed the amount of new loans granted in Greece. In the second quarter of 2007 (April-June), new loans amounted to -1.9 billion in Greece and to -1.3 billion in foreign markets, compared to -1.3 billion and -428 million, respectively, year-on-year. In the first half of the year, the total loans granted by Eurobank rose by 33.1 percent, to -40.5 billion, with domestic loan growth standing at 22 percent but skyrocketing by 109 percent in New Europe. This has led the group’s administration to plan an upward revision of its economic financial targets for 2010. The group’s primary target for the end of 2010 was to achieve profits of at least -1.55 billion, compared to estimated 2007 profits of -820 million. This translates into an average annual increase of 24 percent. Analysts believe that the revision of average annual profit growth may be hiked to 28 percent, which means that profits at the end of 2010 would amount to over -1.7 billion. Other analysts, displaying even greater optimism, stress that the strong growth of business outside Greece could justify an increase in the bank’s domestic annual growth rate of 30 percent. Significantly, the figures announced by the group do not take into account the benefits derived from Eurobank’s expansion to the major markets of Poland and Ukraine. At the end of the first half of 2007, the number of Eurobank branches stood at 1,400, of which 900 were located in New European states. A revision of financial targets is also dictated by a recent increase in share capital, valued at -1.2 billion. The fresh capital will allow Eurobank to accelerate its growth rates both outside Greece and domestically.