Eurobank EFG Capital Markets Day held in London

“Eurobank EFG Group is in the process of building a second growth engine in New Europe, which is based on prudent acquisitions, organic growth and the replication of its successful Greek business model. Following a period of restructuring and important investments in the 6 markets of New Europe in which it is present, the Group now enters a new phase of superior profitability and strong value creation for its shareholders.  Its strategy and targets for network expansion and strong and accelerating profitability are ambitious but achievable. Our dynamic and entrepreneurial management team as well as the successful Eurobank model are key advantages to achieving this”.  These were some of the basic points outlined by Mr. Nicholas Nanopoulos, Eurobank EFG CEO during the Capital Markets Day (CMD) held in London today (23/03/07) about the Group’s strategy and financial targets in New Europe within the next 3-5 years.

The Group’s targets for New Europe are:
• net earnings of more than €60 m for 2007 and more than €260 m for 2009• cost to income ratio of less than 58% by 2009,and
• return on required Equity of more than 15% by 2009
These financial objectives should be put in context with the overall Group targets for 22% CAGR of net earnings until 2009, ROE of more than 25% and cost to income below 45% by 2009.

The CMD presentations were made by Messers Byron Ballis & Nikolaos Karamouzis (Deputy CEOs), Giorgio Pradelli (General Manager, International Division) and the General Managers of Group’s subsidiaries: in Bulgaria (Postbank) Antonis Hassiotis, in Romania (Bancpost) Mrs Manuela Plapcianu, in Serbia (Eurobank EFG Stedionica) Stavros Ioannou, in Turkey (Tekfenbank) Mehmet Erten and Mrs Banu Basar (EFG Istanbul Securities’ Managing Director), in Ukraine (Eurobank EFG) Miltos Papanikolaou, and in Poland (Polbank EFG) Kazimierz Stanczak.

Elaborating on the Group’s strategy over the next 3-5 years, the presenters emphasized that rapid organic growth is based on strong network expansion, namely by doubling the number of branches, to reach over 1,400 branches in the region by 2009.  Furthermore the number of Business Centres will increase to over 120, from 20 operating today.

Based on the Group’s targets, by 2009, total loans will reach at least €19 bn.  For 2007 net loan additions will reach €3.5 bn which represents approximately 70% of what the whole Eurobank EFG Group added in 2004.  In other words, in almost three years a second growth engine has been created for the Group.  Today, Eurobank EFG Group is well positioned in New Europe markets and can compete with major international players on an equal-equal basis. 

With approximately €7 bn in total assets at the end of 2006, the Group ranks No7 in the banking sector in the countries where it is present.  In the 1st wave countries (Bulgaria, Romania and Serbia) the Group aims to become the No3-4 player in the near term.  In the 2nd wave countries (Poland, Turkey and Ukraine), given their largest size, the Group can profitably expand and target one of the top 10 positions.  It is worth noting that this franchise was mainly built in the last two years investing a total of €1 bn.

Eurobank EFG CEO, Mr. N. Nanopoulos, highlighted that the success of the Group strategy depends upon its ability to meet the serious challenges ahead.  “We shall meet strong competition both in our effort to expand our market share and to sustain attractive margins.  We will focus on ensuring credit quality and funding capacity, promoting IT and operational efficiency and maintaining and incentivizing top talent both at the local and central level.  We are committed to meeting these challenges and attaining our ambitious targets” Mr. Nanopoulos concluded.

The audience at the Capital Markets Day of Eurobank EFG included representatives of Institutional Investors and analysts.