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Greek banks eye prosperous Cyprus market March 29, 2008

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Cyprus’s stable economic environment, accompanied by a strong growth rate of over 3.5 percent, growing mortgage demand and an increase in foreign deposits are the primary elements drawing the attention of Greek bankers who wish to enter the Cyprus market.

An Alpha Bank team is planning to visit Cyprus in the coming days for the opening of its new, privately owned building, and is expected to announce further plans to boost activities on the island. Last week, a National Bank delegation was also in Cyprus for business matters.

Greek banking groups are now renewing their interest in the Cyprus market, attracted by the large foreign deposits coming into the country, as well as by the momentum offered by business initiatives assisted by foreign funds. At present, Russia and Ukraine play a leading role in such business moves, facilitated by an especially favorable tax system. Other highly promising areas are the housing and real estate markets.

Significant aid to foreign companies wishing to operate in Cyprus is offered by a favorable tax system, which translates into corporate taxation of 10 percent, as well as the country’s double taxation avoidance agreements. The country’s admission into the eurozone is another positive aspect that comes into play.

Over the past two years, deposits in foreign exchange by non-EU residents rose as much as 59 percent to 18.5 billion, according to data from the Cyprus Central Bank. Bank officials explain that despite Cyprus’s limited population, interest from banks is high, considering the excellent potential for growth in both corporate and retail banking.

The dominance of local banks is not seen as obstructing the profitable operation of Greek banks. Alpha Bank’s Cyprus operations are its most profitable in SE Europe, allowing the Greek bank to plan an increase in the number of its branches from 35 to 50. In the Cyprus market, Alpha has a 9.6 percent share in loans and 6.6 percent in deposits.

Strong interest in the Cyprus market has also been also shown by Piraeus Bank, following its takeover of Arab Bank, which has been incorporated into the bank’s network and has plans to open another 10 branches. Piraeus group’s business plan forecasts an increase in loans from 30 million to 800 million, as well as a growth in deposits from 20 million to 1.5 billion.

National Bank, which already operates 15 branches in Cyprus, is highly active in business credit, with a 4 percent share of the specific segment. EFG Eurobank does more corporate banking and plans to establish three new business centers within 2008.

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Greece’s Alpha Bank to buy Ukraine’s Astra Bank March 28, 2008

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Alpha Bank, Greece’s third-largest lender, said yesterday it had reached a deal to buy a majority stake in newly established OJSC Astra Bank in Ukraine as part of plans to expand in the region.

Alpha Bank said it had agreed to buy 90 percent of Astra Bank at a price reflecting Astra’s equity capital of 9 million euros ($14.2 million). “With this acquisition, Alpha Bank gains a presence in a fast-growing market in one of the largest countries in Southeastern Europe,” the lender said.

Astra Bank plans to set up a nationwide branch network by 2010, targeting 50 branches by the end of this year, which will mean an investment of 130 million euros. Ukraine’s banking market has been on the radar screen of other Greek banks as well.

Greece’s EFG Bank in Mideast venture March 14, 2008

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EFG International, the Swiss private bank founded by the late Greek shipping tycoon John Latsis, said it has started a joint venture with Beirut-based Lebanese Canadian Bank to improve access to clients in the Middle East.

Zurich-based EFG will own 51 percent of the venture, called LCB Capital Management Ltd, which will operate from London and is effective immediately. Lebanese Canadian Bank had assets under management of $3 billion at the end of 2007, EFG said.

Bank of Cyprus among the world top banks March 12, 2008

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The Bank of Cyprus has been declared as Cyprus’ best bank for a second consecutive time, in Global Finance’s World’s Best Developed Market Banks 2007 report.

According to a Bank of Cyprus’ press release, the winners were those banks that attended carefully to their customers’ needs and accomplished enviable results while laying the foundations of future success.

In securing the award for Cyprus, the Bank of Cyprus fulfilled criteria such as growth in assets, profitability, geographic reach, strategic relationships, new business development and innovation in products.

All selections were made by the editors of Global Finance, after extensive consultations with bankers, corporate financial executives and analysts throughout the world. Global Finance is a well-known magazine with 50,000 subscribers and more than 250,000 readers in over 158 countries.

Wind Hellas to merge with Tellas February 26, 2008

Posted by grhomeboy in Business & Economy, Telecoms.
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Egyptian businessman Naguib Sawiris has three main priorities in Greece.

The first is to acquire a small local bank that will assist cell-phone network Wind Hellas to develop mobile banking applications; the second is the installation of an underwater cable to link Greece with Egypt; and the third is the incorporation of alternative land-line service provider Tellas into Wind Hellas, a process that has presented more problems than originally foreseen.

Sawiris recently told Greek journalists, “We are negotiating with a small-sized bank in Greece so that, combined with our investment in telecommunications and particularly in cellular telephony through Wind, we can develop mobile banking services.” He avoided giving the name of the bank, but noted that negotiations may be completed soon. Possible acquisition candidates are Aspis Bank and Millennium Bank. He indirectly rejected the possibility of a buyout of Geniki Bank, which belongs to France’s Societe Generale.

On the underwater cable, he said it is a $200 million investment, estimated to be complete by mid-2009, with his company having already secured a license from the Egyptian government.

Sawiris also stated that Tellas is a strategic asset, but has not garnered any returns yet. The merger with will proceed, but Tellas will maintain its separate status and name. He added that parent company Weather Investment has become one of the biggest telecom groups, with about 100 million customers in its 10 years of operation.

Cyprus issues new market risk guidelines February 6, 2008

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Cyprus’s banks have to comply with a new set of guidelines governing market risk management, the island’s Central Bank said yesterday.

The four main types of risks covered in a central bank circular are related to interest rates, equity, foreign exchange and commodities.

Banks, the circular said, must have suitable policies and processes that clearly allocate responsibilities regarding market risk and must set market risk limits proportional to their size.

Systems and controls have to be in place ensuring that all transactions are captured on a timely basis and that market positions are revalued at least on a daily basis.

The new set of guidelines adds to existing ones on the internal capital adequacy assessment process in market risk management. They are applicable to banks supervised by the Central Bank or incorporated in Cyprus, including their subsidiaries and overseas branches.

“The principle of proportionality acknowledges the fact that significant differences may exist between the activities of banks and, consequently, the risks emanating from their activities might not be similar,” the Cyprus’ Central Bank said.

According to the circular, banks have to manage their exposure to market risk both on a stand-alone basis and on a group basis. The banks must also measure market risk by performing scenario analysis, stress testing and contingency planning, as well as periodic validity testing.

Further, “the market data used to value trading book positions must be verified by a function independent of the lines of business, e.g. by the bank’s internal audit function,” the Cyprus’ Central Bank said.

SocGen has no plans to sell Geniki Bank November 12, 2007

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Geniki Bank’s administration has denied reports that Societe Generale plans to sell the bank, with CEO Patrick Couste stressing that the French group’s expansion in Greece was a strategic move for SocGen.

Couste also said of the parent group’s determination to restructure and further develop the Greek bank, underlining the major increase in share capital currently under way. Holding a 52.33 percent stake in Geniki, SocGen would cover all of its rights in the increase, while the French group has expressed willingness to cover any rights not taken up.

According to officials from the French group, Societe Generale’s expansion to Greece was a strategic choice and selling subsidiary banks or moving out of countries is not part of the group’s philosophy. Indicatively, they cited only two cases in which SocGen has ever exited from investments in foreign countries, specifically in Argentina, where it sold a subsidiary bank, and in Nigeria, with the termination of certain activities there, in both cases being compelled by extraneous factors.

To further bolster Geniki Bank, the parent group decided to go ahead with a share capital increase of 210 million euros, with procedures expected to have been concluded by Monday. The increase was deemed to be imperative in order to restore the bank’s capital base, as its six-month capital adequacy index dropped to 4.75 percent, way below the 8.0 percent limit imposed by the Bank of Greece.

Geniki officials estimate that the credit institution could be back on a profitable track in 2008, saying that certain operations which had caused a major increase in expenses have since been remedied through network renewal, portfolio streamlining and restructuring of internal processes, and would allow the bank to henceforth operate on a new footing. In addition, Geniki is planning to market a series of new products in the field of bancassurance, as well as in consumer credit.

In recent weeks, the bank’s stock has been drawing investor interest, with a major increase in the volume of transactions. The upward trend was fed primarily by speculation about possible changes in Geniki’s ownership. Though stock market officials regard it as a natural development in view of the fact that the bank’s share price had fallen to historic lows.