Best bank
National Bank of Greece
Best debt house
Citigroup/Schroder Salomon Smith Barney
Best equity house
EFG Eurobank Ergasias
Best M&A house
CSFB
National Bank of Greece is the country’s largest bank with, analysts estimate, a share of around 40% of national deposits and 30% of loans. The bank is a leader in domestic retail and commercial banking and, increasingly so, in investment banking. “Don’t let the degree of government ownership fool you,” says one Greek investment banker working for a leading international firm, [the state still owns15% of the bank which has been privatized in stages] “National Bank of Greece is an impressive outfit.”
If reported results are any guide, he’s not kidding. National Bank of Greece posted a return on equity of 27.3% for 2000 and an efficiency ratio of 50% – figures that might bring a blush to the cheeks of the chairmen of many banks among its western neighbours. And it’s not as if the bank is under-capitalized. It has a 12.2 % capital adequacy ratio.
Like most Greek banks, National Bank of Greece has been keenly aware of the prospect of increased competition following the country’s entry into the euro bloc. Not only has it cleaned up its balance sheet and improved its performance in recent years under chairman Theodore Karatzas, it has expanded internationally with an acquisition drive in the Balkans, including Bulgaria and the former Yugoslav Republic of Macedonia.
At home, the bank’s main strategic thrust has been into retail banking, with the aim of providing more and better products to the two-thirds of the working population of Greece that are already its customers. It has expanded in credit cards and invested in the technology required for alternative distribution channels, redesigning its branches in the process.
It has set up credit centres for lending to small and medium-size businesses and is the country’s leading bank for ship financing. And National Bank of Greece has arranged large syndicated loans for Hellenic Petroleum and Cosmote Cellular Network.
There is constant speculation in Greek banking circles over future consolidation, both domestic and cross-border. A strong rumour last year was that National Bank of Greece might merge with Alpha Bank, the country’s second largest bank. This now seems unlikely.
But National Bank of Greece executives have discussed the idea of joint ventures and alliances with foreign partners that might bring sophisticated banking products to underserved Greek consumers.
Many international investment banks have already been attracted into the Greek market over the years, including CSFB and UBS Warburg. Notably, Citigroup/Schroder Salomon Smith Barney has been the leading arranger of international bond issues for Greek borrowers, leading the e2.6 billion issue for the Hellenic Republic, a e400 million deal for Public Power Corp and a e625 million deal for the Coca-Cola bottling operation in Greece. Citigroup has also been a leading arranger of loans to Greek companies.
Investment bankers working on the country’s privatization programme have learned the value of patience. Deals take a long time to come to fruition, as CSFB for one has learned during its long efforts to find a buyer for Olympic Airways. It did at least have the satisfaction of advising on both sides of the largest and most high profile deal of the past 12 months: the $6.9 billion merger of Hellenic Bottling Company with Coca-Cola Beverages, which has created the second largest Coca-Cola bottler in the world. The firm’s mandate to dispose of a strategic stake in OTE turned into a convertible bond exercise in April.
In the Greek equity market, EFG Eurobank Ergasias is emerging as a powerful player. The group, built up through mergers, now claims to have a 10% secondary market share in Greek stocks. It has been a leading arranger of and participant in initial public offerings on the Athens Stock Exchange, acting as domestic lead manager on the e300 million IPO of Cosmote, the leading mobile phone company that was spun out of OTE last October. The firm worked on 46 Greek IPOs last year, including those for Germanos, the leading mobile phone retailer and for internet service provider, Forthnet.
