Greece's Eurobank sees Balkan units doubling profitability -deputy CEO

Banca Transilvania

15/01/2018 22:01

By George Georgiopoulos 
    NICOSIA, Jan 16 (Reuters) - Eurobank  EURBr.AT  will 
maintain its Balkan footprint in Bulgaria, Serbia and Cyprus 
after pulling out of Romania, its deputy CEO said on Tuesday, 
expecting the group's subsidiaries there to double their 
profitability over the next few years. 
    Greece's third-largest lender by assets clinched a deal in 
November to sell its Romanian unit Bancpost to Banca 
Transilvania  ROTLV.BX , Romania's second-largest bank, as part 
of a restructuring plan agreed with European Union authorities. 
    That sale closed a decade-long chapter of ambitions by 
Eurobank and other Greek lenders to spread their wings abroad 
after the country's debt crisis forced them to retreat and sell 
foreign subsidiaries to boost their capital ratios. 
    "Foreign operations contribute more than 50 percent of the 
group's profitability. Our immediate target is to grow this to 
200 million euros (from 110 million)," Deputy Chief Executive 
Stavros Ioannou told reporters. 
    Executives said these countries have emerged from the 
financial crisis and their economies are now expanding by 3 to 4 
percent annually, meaning there is room to grow lending to 
businesses and households.  
    After deleveraging its non-Greek assets to 8.7 billion euros 
from about 11.2 billion, meeting commitments agreed with EU 
competition authorities, Eurobank is set to emerge as the lender 
with the largest international presence among its Greek peers. 
    The group was fast to pull out of Poland and Turkey at the 
onset of the global credit crisis in 2008 and sold its Ukraine 
operations in 2016. 
    "Our strategy was to exit countries that were too large for 
us to become one of the five biggest banks there. To achieve 
this would take a lot of investment," Ioannou said. "Romania 
required more investment for us to become a sizeable player." 
    But in Bulgaria, where Eurobank bought the network of peer 
Alpha Bank  ACBr.AT , its unit Postbank is now the fifth largest 
bank by assets and the only Greek-owned franchise there after 
the sale UBB by peer National Bank  NBGr.AT  and Piraeus Bank's 
 BOPr.AT  expected exit. 
    "If we find a good opportunity in Bulgaria we will look into 
it," Ioannou said. Profitable Postbank competes with big players 
Unicredit  CRDI.MI , Austria's Raiffeisen  RBIV.VI  and Societe 
Generale  SOGN.PA  in Bulgaria. 
    In Serbia, profitable unit Eurobank Beograd is the seventh 
largest among 31 banks in the country while fully-owned Eurobank 
Cyprus has grown to the island's third largest by deposits.     
 
 (Editing by David Evans) 
 ((george.georgiopoulos@thomsonreuters.com; +30210 337 6437; 
Reuters Messaging: 
george.georgiopoulos.thomsonreuters.com@reuters.net)) 
 
Keywords: EUROBANK BALKANS/STRATEGY