Five largest Greek banks invested more than 2 billion euros in SE Europe

   The five largest Greek banks have made overall investments of more than two billion euros in SE Europe, establishing a network of approximately 950 branches that employ 16,000 people, and commanding more than 16 percent of the banking market share in the region, according to figures released on Sunday by the Union of Greek Banks (EET).

    Alpha Bank managing director Dimitris Mantzounis, in an article in the latest EET informational bulletin, said that although these investments have not yet yielded the anticipated results, the profits of the Greek banks from activities in the region nearly doubled to 130 million euros in 2004 from 70 million euros in the preceding year (2003), marking an 86 percent increase.

    The operational plans of the major Greek banks predict even greater expansion over the next few years, aimed at profits from activities in the wider region of SE Europe accounting, by 2007, for up to 20 percent of their overall profits, from below 10 percent currently.

    Foreign banks control two-thirds of the assets of the banking system in the countries of SE Europe, with Austria controlling 25 percent, followed by Greece and Italy with 13 percent each. The highest percentages of penetration of foreign banks are recorded in Albania and Bulgaria (above 90 percent), followed by Romania (60 percent) in which privatisations are continuing.

    The growth margins of the banking sector in the Balkan countries is comparatively high, given that the overall assets of all the banks barely exceeds 36 billion euros, while in Greece the overall assets of the banking system exceed 260 billion euros, according to the EET bulletin. Financing in the Balkan countries, as a proportion of GDP, is just 25 percent, compared with 77 percent in Greece and 114 percent in the eurozone.

    In the coming years, financing to private entities and business concerns in the 5 Balkan countries is estimated to continue to increase at an annual average rate of more than 25 percent. Financing to private entitites shows even greater margins for growth, given that it barely exceeds 12 percentage points of GDO, compared with 33 percent in Greece and 56 percent in the eurozone, resulting in large growth margins for banking activities in the region.