Interview of Deputy CEO Mr. N. Karamouzis to Reuters, 14 January 2008 | Eurobank
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Interview of Deputy CEO Mr. N. Karamouzis to Reuters, 14 January 2008

INTERVIEW-Greek Eurobank sticks to 2008-10 profit guidance     
By George Georgiopoulos.

 ATHENS, Jan 14 (Reuters) - EFG Eurobank (EFGr.AT), Greece's second largest lender, is sticking to its business plan's profitability and growth targets despite the credit crunch, its deputy chief executive said on Monday.
The international credit crisis has not affected Greek banks. Lacking exposure to sub-prime loans, Greek lenders have captured higher growth in neighbouring emerging markets.
"The results of 2007 will be in line with the basic targets we have set," the group's Deputy CEO Nick Karamouzis told Reuters in an interview.
"Our projections for earnings and growth of activities in Greece and the wider region of southeast Europe in 2008-10 continue to hold as presented in August last year," he said.  "The group's growth and profitability prospects outside Greece are especially favourable."
Strong lending growth at home and in southeast Europe drove EFG's nine-month net profit 29 percent higher as the group's investments abroad started to pay off. Eurobank has expanded outside Greece to fast growing markets in Romania, Bulgaria, Poland, Serbia, Ukraine and Turkey.
EFG Eurobank, with a current market value of 10.8 billion euros, expects group net profit to grow to 1.55 billion by 2010 from an estimated 820 million in 2007.
SURPLUS LIQUIDITY
Asked to comment on a recent Deutsche Bank report that said Eurobank would need to raise about 7 billion euros to fund its loan growth, Karamouzis dismissed the projection saying it was based on erroneous data.
"Eurobank today has surplus liquidity of several billion euros and we continue to grow customer deposits at an annual 28 percent pace. Moreover, following last September's rights issue our capital base is particularly strong," he said.
Last week Deutsche Bank downgraded its recommendation on shares of Eurobank to "hold" from "buy", citing the potential for negative earnings revisions this year. It lowered its price target for the shares to 26 from 33 euros.
Eurobank shares trade about 12 times estimated 2007 earnings versus a P/E ration of 11.7 for Greece's banking sector, according to Reuters estimates.
The investment bank said there could be a 5 percent negative impact on 2008 estimated earnings if the group did not manage to raise the estimated liquidity.
It said that among Greek banks, Eurobank, Piraeus and Alpha have loan to deposit ratios above 100 percent. If banks cannot find liquidity to fund loan growth, they will be forced to reduce their loan growth.
"Deutsche Bank's report is based on erroneous data and assumptions and therefore presents a distorted picture of the bank's prospects. We have informed Deutsche on this matter," Karamouzis said.
He said Greek banks do not have exposure to sub-prime loans or related high risk products like CDOs (collateralised debt obligations) which are troubling many financial companies.
"The soundness of the Greek banking system is high. The credit crisis will impact Greece's banking market only indirectly, via a higher cost of money. It will not materially affect prospects and expanding activities," Karamouzis said.

He said Eurobank and other big Greek lenders have a special advantage -- their strategic expansion outside Greece. They are now present in countries with significant growth prospects.

"Greek banks will be gradually enjoying growing earnings and rising volumes from these markets," Karamouzis said.