EFG Eurobank Ergasias organised today a presentation to members of the Association of Greek Institutional Investors

EFG Eurobank Ergasias organised today a presentation to members of the Association of Greek Institutional Investors, on the Bank’s current position, its vision and strategy, as well as its prospects within the new competitive Greek banking environment.

EFG Eurobank Ergasias organised today a presentation to members of the Association of Greek Institutional Investors, on the Bank’s current position, its vision and strategy, as well as its prospects within the new competitive Greek banking environment. The presentation, hosted by the Bank's Chief Executive Officer Mr Nicholas Nanopoulos, is part of a wider investor relations initiative implemented by the Bank, addressing local and international investors, according to international best practice for information transparency and reliability.
The presentation emphasised the changing conditions within the local banking sector, the challenges that Greek banks are presented with, and the abilities they must possess, in order to benefit from the resulting opportunities. The main factors that shape the new Greek banking environment are:

Growth rates of the Greek economy, which are expected to continue growing at double the pace of European growth rates, mainly due to the European Union Support Framework, the 2004 Olympic Games, and the local structural reforms, etc.

Growth rates of the Greek banking system, which are expected to remain quite high, given the relatively low contribution of banking sector credit to Greek GDP. In particular, consumer and mortgage credit as a percentage of GDP are less than half of the respective rates of comparable markets, such as Spain and Portugal, implying significant growth potential.

The relatively low, by European comparison, contribution of commissions from banking services as a percentage of total operating income. Commission generating segments such as capital markets, brokerage, asset management and insurance exhibit significant growth potential.

The wider region presents important growth opportunities for Greek banking groups possessing the right prerequisites and infrastructure. EFG Eurobank Ergasias is readily positioned to benefit from these opportunities presented by the environment, as it commands strong competitive advantages and enjoys strong market position to gain from the development of the market. Another interesting point is the low level of cross selling in the Greek banking market, with a current average ratio of under two products per customer, compared to an EU average of four. EFG Eurobank Ergasias employs specific policies for the growth of cross selling, targeting the under-exploited retail banking potential of its acquired networks. Mr Nanopoulos characterised the rising competition among Greek banks as particularly intense and mentioned that the Greek banking sector is among the most concentrated sectors in Europe. «Developments are moving towards two seemingly contradictory directions. On the one hand there is discussion for the creation of larger groups through mergers, which will result in even higher concentration in the sector. On the other hand, at the opposite end of this logic, new players enter the market, disregarding the message of the times and the importance of ‘minimum critical mass’ in the present competitive environment», Mr Nanopoulos said. And he continued: « What ought a bank of the size, the dynamic growth and the history of EFG Eurobank Ergasias do? The answer is simple: nothing that does not serve the interest of its shareholders in the long run. It is easy to engage in ‘flamboyant’ actions, but what is difficult is to plan and to successfully implement initiatives that create shareholder value on a long-term basis. For us, size and market shares are not an end in themselves, but come as a result, not a precondition, of success. The issue is whether an organisation possesses the critical size and competitive characteristics in the markets or segments that it is active in. Mr Nanopoulos continued: « As far as EFG Eurobank Ergasias is concerned, nobody could claim that we are not competitive, as we occupy either the top or second position in all the main banking segments that we engage in, and exhibit a dynamic growth. Therefore, any structural changes in the Greek banking landscape are no sources of stress, and definitely do not impose on us the need for actions that are not compatible with our strategy. For us it is sufficient to have equal opportunities and a healthy competitive environment.» Mr Nanopoulos pointed out that the strategy of EFG Eurobank Ergasias ensures its leading role in all of the important segments of banking activity, and creates the necessary requirements for the growth of operations and organic profitability in the medium term. He concluded:«As a result, it is neither necessary, nor desirable, to seriously alter our strategy by current developments.» Referring to the progress of the Bank’s activities, Mr Nanopoulos stressed that EFG Eurobank Ergasias has at present an established, dynamic, leading presence across the spectrum of financial products and services. At the same time, the Bank possesses the ability to continue growing at rapid paces and to enlarge its market shares, gained at the expense of the competition. This course is reflected in the Bank’s figures, as, in 2001, the growth in loans, as well as deposits and repos, was in the order of 25%, the highest among the leading Greek banks. According to Mr Nanopoulos, it is particularly important that this growth focuses on segments displaying high profitability and further growth potential.
Thus, the market shares of EFG Eurobank Ergasias in the Greek banking sector, concerning the nine months 2001 were as follows:

Consumer Lending: 24%

Mortgage Lending: 12%

Mutual Funds: 20%

Credit Cards: 28%

IPOs for ASE listings: 19%

Brokerage: 10%
Regarding the stock market performance of EFG Eurobank Ergasias, Mr. Nanopoulos noted that «the share price receded by 25% in 2001, compared to the 24% slide of the ASE General Index. While this development is not satisfactory, what is encouraging is that our share outperformed the ASE Banking Index by 10% and had the best performance amongst the large Greek banks. This development demonstrates the growing trust in the Bank’s potential to sustain a leading role and in its strong long-term prospects.»