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General Assembly

“Thanks to Greece’svigorous economy, prospects for the further growth of the domestic banking sector are positive. Despite the strong competition, banking organizations that are able to rely on the most sustainable forms of revenue, namely, organic revenues and profits, face healthy prospects of steady growth, and exhibit resistance to adverse circumstances and a healthy and sustainable profitability.

Thanks to Greece’svigorous economy, prospects for the further growth of the domestic banking sector are positive. Despite the strong competition, banking organizations that are able to rely on the most sustainable forms of revenue, namely, organic revenues and profits, face healthy prospects of steady growth, and exhibit  resistance to adverse circumstances and a healthy and sustainable profitability. The EFG Eurobank Ergasias Group has all those features that are necessary to ensure very strong prospects for the further growthof operations and organic profits, and to compete successfully in the Greek banking industry”. The Chief Executive Officer of Eurobank, Mr. N. Nanopoulos,made this observation during his speech at the Bank’s Annual Ordinary General Meeting of Shareholders, which was held yesterday and which, among other items of the agenda, approved the financial results for the year 2003.

Addressing the Shareholders, President of the Bank Mr. X. Nikitas referred to the course of the Greek economy and analysed developments in the credit system; in so doing, he expressed the view that the current year lookspromising: “The data, up to now, reinforce the view that we will make the most of the opportunities before us, both at the business level and the level of the national economy, allowing us to maintain a self-sustaining, high-growth path for many years to come. The business world awaits with interest the Government’s positions on various issues, such as development policy, structural changes, taxation policy, with a view to a new framework that will strengthen, indeed, enhance entrepreneurship. Despite the work that has been done at the fiscal level and in individual markets, there is still wide scope for the modernization of our economy in the globalized environment.This certainly does not mean that the Government must formulate its stance without consulting, or indeed at the expense of, society.”

The Chief Executive Officer of EFG Eurobank Ergasias, Mr. N. Nanopoulos, referred at the outset to the general economic environment and how it affects the operations of Greek banks, stressing that: “There are great prospects for further growth of the banking business. I mention indicatively that credit expansion in Greece for 2003 increased at an annual rate of 17%, which is about three times the European average, while total household lending, as a percentage of GDP, lags significantly behind the European average”.

Mr. Nanopoulos then referred to the course of the Group and the results for 2003, pointing out that: “Eurobank has dynamically strengthened its presence, both in the domestic market and in the markets of South-eastern European countries. It has managed to increase its volume of business in the fastest-developing sectors, significantly improve its revenues and increase profitability. 

“With regard to financial performance, in 2003 our consolidated net profits (after-tax) increased by 39%, to €273 million, and this is particularly important considering the resilience of our profits in 2002, when our total profits decreased by only 3%, while our organic profits increased by 8%. The considerable fortification of our profitability also improved the after-tax rate of Return on Equity, to 15.1%”.

According to Mr. Nanopoulos, a qualitative fact that is worth highlighting is that in 2003 the consolidated organic profits, i.e., revenues from interest and commissions – which do not include profits from financial transactions in the currency markets, bonds or shares nor profits from real-estate capital gains – increased by 24% to €338 million and are the highest in the Greek banking sector. He added: “Another fact that I would like to underline is that 95% of total operating revenues derive from organic sources, i.e., interest and commissions, and this percentage, too, is the highest among Greek banks.”

He noted that “the dynamic growth in our profits has been primarily based on the strong increase in loans, by 22.2% on a consolidated basis, and by 19.2% in Greece, while outstanding balancesamounted to a total of €16.3 billion.

“Organic revenues, which include net earnings from interest and commissions, increased significantly by 19% and exceeded €1,150 million. Total operating revenues increased by 22.5% and exceeded €1.2 billion.

“We also had very positive results  in reducing operating costs. The latter’s rate of increase, as far as activities in Greece were concerned, saw a considerable deceleration, down to 3.9%, while the cost-to-income ratio was below 53% at a very competitive level by European standards.”


The Chief Executive Officer of Eurobank next cited the Bank’s progress in individual sectors: “In consumer and mortgage lending, we further expanded our market share and strengthened our position, by offering modern and flexible products on very attractive terms. There has been also a strong development in the area of loans to professionals and small enterprises, where we developed innovative ideas and new competitive products. In total, retail banking loans increased by more than 30%.


“In the field of corporate banking, we further enhanced our position and expanded our cooperation with numerous business groups in the country. Thanks to a new, modern structure that we adopted, we offer an integrated range of products and services that fully meet the needs of our corporate clients in Greece and in the Balkans. In this way, we meet the full range of companies’ financial needs over and above the classic forms of financing, such as leasing, factoring, investment banking, risk-management structured products, stock-exchange trading, real-estate development, insurance services and payroll services.


“Total client funds under management increased by 10.3%. Specifically, in mutual funds we enjoy a commanding position with a market share of 20% of the total, excludingmoney-market funds. The high quality of the services provided is attested to by the fact that, for the second year running, three mutual funds of EFG Mutual Fund Management Company S.A. are certified by the international rating agency Standard & Poor’s, and are the only Greek mutual funds with international certification. 

We also achieved strong growth in institutional and discretionary asset management , as well as in private banking, which provides high-standard consulting and management services.

“The Bank also maintained its leading position in Investment Banking, i.e., the underwriting of public listings and private placements, as well as debt issues and consulting services to enterprises. It also participated in 13 of the 16 public offerings that took place in 2003. Furthermore, it confirmed its leading position in Brokerage Services, where it also significantly increased its market share from 13% to 16.5%, based on the value of transactions. Finally, there has been a considerable increase in insurance activities, rendering Eurobank a significant player in this market within a very short period of time”.

With reference to the performance of Eurobank’s share, the Chief Executive Officer pointed out that in 2003 its price increased by 38%, against a rise of 29.5% for the Athens Stock Exchange’s General Index and of 21.6% for the Eurostoxx European Banking Index. In 2003, Eurobank’s share was included in the Europe-wide stock-market index FTSE Eurotop 300 comprising the major listed companies in Europe, while it was also among the 12 shares forming the reserve list of the FTSE Euro 100 index, which consists of the 100 major blue chips of the Eurozone.

The Bank’s strong capital base allows for the cancellation of 6 million shares in the context of the Bank’s share buy-back programme; this corresponds to approximately 2% of the Bank’s equity capital. This action improves the Return on Equity  and earnings per share, and supportsthe Bank’s stock-market valuation. At the same time, there are plans for the continuation of the buy-back programme.

Referring to the Bank’s expansion in South-eastern Europe, Mr. Nanopoulos stated: “We aim to build a leading presence in a wide geographical area, which has a total population of more than 50 million people. At the same time, we advance Greek entrepreneurship in these developing markets, which are in a process of transformation and convergence with the European Union. The expansion of our operations in these countries creates the platform and the conditions for boosting the Bank’s profitability in the medium-term, a trend that is already visible. In 2003, our Group undertook significant strategic initiatives in this direction, strengthening its presence in Bulgaria, Romania and Serbia-Montenegro. 

The Group’s strategy for 2004, as Mr. Nanopoulos pointed out, remains firmly orientated towards maintaining the current high growth rates, focusing on the sectors that provide high returns, and further enhancing its presence, both in Greece and in the markets of south-eastern Europe. “We are equipped with significant skills to foster secure  conditions for growth and profitability in the future. For this reason, the management of the Bank is, for the first time, in a position to announce specific targets for both 2004 and 2005, on the sole condition, of course, that the Greek economy’s healthy growth  continues.


In particular, we set out to achieve the following targets:

Raise profits per share by over 20% per annum and increase the dividend per share by more than 12% per annum.

These goals will be achieved based on:

1.      Revenue growth exceeding 14% per annum

2.      Cost / Income ratio below 53% at group level and below 50% for Greek operations in 2005

3.      Return on Equity (ROE) to exceed 18% in 2005

Mr. Nanopoulos also stated: “We base our optimism as regards the continued development of our Bank and the achievement of our targets on the following: 


  • The completion of the organizational and operational restructuring which ensures a more client-oriented approach, with greater extroversion, penetration and effectiveness in our operations.
  • The further expansion of our presence in the most profitable segments of the market, which ensures rapid growth, and a Net Interest Margin of over 3%.
  • The organized expansion of our operations in South-eastern Europe, taking advantage of the opportunities that are available in these emerging markets.
  • Our ability to keep cost growth under control and to improve our productivity.
  • Our ability to effectively manage and control market, credit and operational risks.
  • Our strong capital base, which makes possible our unhindered growth.
  • And finally, the quality, competence and dynamism of our staff, who have proved their dedication to the Bank’s targets and vision.

The Bank’s high profitability allows the Board of Directors to propose to shareholders the distribution of a total dividend of €185 million, which is the highest total distributed dividend among the Greek banks.

The General Meeting approved the proposal of the Board of Directors thus the share will be traded ex-dividend on the Athens Stock Exchange as of Tuesday, April 6th, 2004. The dividend of €0.60 per share, will be paid to Shareholders starting on Monday, April 19th 2004. With the distribution of 68% of net profits as total dividend, the dividend yieldof our Bank’s share amounts to 3.9% (price at  end-2003), which is one of the highest yieldsin the Greek capital market.


Beside the approval of the dividend, the General Meeting also approved the other items on the agenda. In particular, it approved:

  • The renewal of the share buy-back programme for up to 10% of the share capital.
  • The cancellation of 6 million Treasury shares already acquired by the Bank as part of the share buy-back  programme to support the share’s market price, , . The cancellation will result in a corresponding reduction in the Bank’s share capital.
  • The distribution of shares and stock options to the employees of the Bank.
The appointment of a new 16-member Board of Directors, consisting of incumbent members of the Board of Directors.