Greek banks hit gold in the Balkans

Greek banks are turning the region of Southeastern Europe into their own backyard. Despite their small size and within just a few years, compared to European financial giants they have managed to acquire a network of 3,000 branches, while their market share in the Balkans is approaching 20 percent. In fact, in certain markets, such as that of the Former Yugoslav Republic of Macedonia, the Greek banks’ share reaches up to 35 percent. The momentum of the sector is clearly obvious in the case of Serbia. Due to the political problems in the country, Greek banks had delayed their penetration. Yet within just two years, they have reversed that situation entirely: As Deloitte consultant data showed, there have been 15 Serb bank acquisitions in the 2004-2007 period, five of which were by Greek banks, one by a Cypriot bank, three from Italian, two from Austrian, two by Hungarian and one from a British bank. Deloitte added that in the same period there were deals for buying out Serb banks adding up to $2 billion, of which 50 percent ($1 billion) concerned deals by Greek and Cypriot banks. The next major step for Greek banks is now in Ukraine. Piraeus Bank has made a significant move by acquiring International Commerce Bank (ICB), which has a network of 133 branches. Now sources suggest that Piraeus is considering the acquisition of another bank in the Eastern European country. Also present in Ukraine is EFG Eurobank, the first from Greece to enter the Ukrainian market by buying out Universal Bank. Alpha and National Bank are also on the lookout for an acquisition target in that country. The high growth rates in this region create expectations for major profits and open opportunities for local credit institutions, which also hope to find a solution there to the problem of the current credit crisis. Of course, there still are problems in the region with political instability, delays and various difficulties cited in many cases. A recent Deutsche Bank report warned about the macroeconomic problems of states in the Balkans and Fitch has downgraded the credit ratings of Bulgaria and