i. Participation and exploitation of opportunities in a very dynamic and higher growth potential -compared to European peers- market. ¡ degreesGreek GDP growth rate is almost double of other western European countries, while lending as a percentage of GDP is still at lower levels, growing rapidly. The Greek banking sector will continue to benefit from the convergence to Western European standards, enjoying a high growth rate, in a dropping margins environment. At the same time, Emporiki will materialize the development of specialized services and products through the cooperation with the respective specialized subsidiaries of CA¡+/- , Mr Crontiras said.
ii. Recapture of ¡ degreesnatural¡+/- market share and cost competitiveness. ¡ degreesThis process will go through the significant transformation potential of the Bank, the decrease of the Cost Income Ratio to match local competitors and the exploitation of synergies with the parent group¡+/-.
iii. Expansion to the rapidly growing S.E European markets, with Emporiki serving as the platform for the development of the CA Group¡¯s business lines in this area. ¡ degreesEmporiki will follow a strong organic growth path in those countries, opening 265 new branches and increasing its headcount by 2,250 people over the next five years, investing approximately 55 million euros¡+/-, Mr Crontiras stated.
Presenting the strategy to be followed in the Retail Segment, Mr Panagiotis Varelas, General Manager of Retail Banking emphasized that ¡ degreesthe commercial strategy of the new Emporiki will be built around competitive pricing, segment specific offerings and product innovation, as well as improved service quality to a level worthy of a modern, dynamic bank¡+/-. As Mr. Varelas pointed out, added value services, cross selling and customer service become increasingly important for the Retail segment, which remains the growth engine of the banking market over the last five years.
The strategic objective of Emporiki in Retail is to achieve 21% per annum growth in mortgages reaching 14.3 billion euros in 2011 (from 5.4 bn in 2006) and a 15% per annum growth in consumer loans (including Credicom) to reach 5.7 billion euros in 2011 (from 2.8 bn in 2006).
The main actions to achieve this objective include the development and implementation of a true personal banking value proposition based on objective customer advise; the development of new branches and the rationalization of the existing branch network; the expansion into new communication and distribution channels (e- banking, interactive ATMs etc); the introduction of customer loyalty and retention programs; the continuous implementation of promotional and advertising activities.
Discussing the SME¡¯s segment trends, the General Manager of Retail Banking said it is the fastest growing segment, in which the ability to provide advise becomes more important than the ability to lend; Emporiki Bank¡¯s strategy focuses on supporting entrepreneurship in Greece to fuel economic growth, extending financial services offering down to the smaller companies¡¯ (personal owner) segment, differentiating offerings based on the various needs of the sub-segments and focusing on financing companies that belong in new advanced technologies. The goal is a 13% per annum growth in SME¡¯s business loans reaching 9.9 billion euros in 2011 (from 5.4 bn in 2006). Main actions include the extension of sector-specific, fee-based product bundles (for smaller companies); the opening of business centers dedicated to serving medium enterprises, leveraging Emporiki¡¯s banking expertise; the establishment of dedicated sales force to support new client acquisition.
Concluding with the Retail market segments, Mr Varelas said that ¡ degreesless transactions and more sophistication are entering the Deposits segment¡+/-, in which Emporiki aims at achieving 11% growth per annum; by diversifying risk with Mutual Funds of funds, Emporiki also aims at 32% annual growth in Asset Management; the expected annual growth in Life Insurance is 70%.
As far as the corporate segment is concerned, Emporiki Bank¡¯s objectives is to maintain its current strong position in the market, while improving the portfolio quality, increase penetration of existing customers, enhance large corporations¡¯ access to international financial markets and services and selectively focus on the growing segments of the broader public sector and Local Administration. The targeted annual growth in large corporate loans is 8% and 24% in Leasing.
Discussing the main international market trends, Mr Varelas made the assessment that ¡ degreesthe S.E European markets will grow very significantly closing the gap with EU penetration, while maintaining high interest margins to Greece despite continuing market entries¡+/-. Competition is expected to intensify and the EU funding to create opportunities for major infrastructure works financing; the Romanian and Bulgarian markets are rapidly growing, and the Cypriot and Albanian markets are becoming increasingly interesting. In order to accomplish the target of establishing Emporiki as a ¡ degreeshub¡+/- for the CA¡¯s business lines in these key international markets, the Bank will follow a strong organic growth path, increasing banking volumes at an annual rate higher than 50% (52% in retail loans, 55% in corporate loans and 50% in deposits).
In his introductory speech, Mr Georges Pauget, Chief Executive Officer of Credit Agricole S.A. referred to 2006 ¡ degreesas a year marked by important strategic movements in Europe, including the acquisition of Emporiki Bank, the only player in Greece that fulfilled the criteria of the Group¡¯s expansion strategy¡+/-. Mr Pauget pinpointed the challenges confronted in the process of integrating the acquired banks to the Group. Still, he said that ¡ degreesthe experience accumulated in Credit Agricole has contributed to the development of a specific integration methodology, which is based on the Group¡¯s culture of cooperation, autonomy and delegation and takes into consideration the fact that an organization such as Credit Agricole is constantly observed by and accountable towards all stakeholders, including analysts and investors¡+/-.
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