Piraeus Bank invests 40m euros to double assets

The Piraeus Bank has announced ambitious growth plans, scheduling investments worth 40 million euros to expand its network, its IT system, and to develop alternative distribution channels.

“Our target is that, within a 3-4 year time horizon, we should reach an 8% market share in terms of assets,” Sofronis Strinopoulos, general manager of Piraeus Bank Romania, told ZF. He says 2006 will be a peak year from the point of view of investments.

“We will build new headquarters, we will add 30 units to our network and if we also include investments concerning the IT system, we are likely to exceed 40 million euros,” said Strinopoulos. To finance these investments, the bank operated two share capital increases last year, together totalling about 27.5 million euros. “We will probably see capital increases similar to those of 2005 this year,” he added.

The bank”s assets are due to double to 1 – 1.1 billion euros at the end of 2006 amid an aggressive network expansion, maintains Strinopoulos.

According to their budget, the volume of loans granted will climb to 780 million euros, an increase of just over 100% in comparison to the end of 2005. The bank at the end of last year registered profit worth almost 4 million euros.

“This year will bring a peak in investments for us and we expect profit to post a slight increase from 2005. Starting 2007, though, we should see profits triple,” Strinopoulos believes.

In line with his policy, Piraeus should become an important player in the domestic banking system, offering products and services for all customer categories, provided through a large network and also through some alternative distribution channels.

He says that the development of the respective channels has already started, and some are already operational.

The bank is going to sell its own products through partnerships with insurance companies, car dealers, as well as retailers.

On the other hand, new internet-banking applications will be developed, which should allow improved access to services and products. Telephone-banking and a call-centre will also be developed.

Strinopoulos believes consumer lending will be the most dynamic financing product this year, too, considering there is enough growth potential on the market. Financing destined to small and middle-sized enterprises will witness speedier growth than consumer lending in the future.