Greeks bearing gifts

Most other banks would have a lot to learn from this Greek group

by Alistair Riddle, Credit Manager, Piraeus Bank

Piraeus Bank is just seven years shy of celebrating its first century. Named after the docks in Athens – Greece still being world-leaders in shipping – the Bank has gradually grown during its first 93 years to the point where it now has a true international presence – with operations from the United States to Egypt, from the United Kingdom to the Ukraine. 

The real expansion of the Group happened following privatisation in 1991. Along with its organic growth, Piraeus Bank made a series of moves to establish a strong presence in the domestic market. Thus, in 1998, the Bank absorbed the activities of Chase Manhattan in Greece, took over controlling interest in Macedonia–Thrace Bank and acquired the specialised bank Credit Lyonnais Hellas.

 At the beginning of 1999, the Bank acquired Xiosbank and absorbed the activities of National Westminster Bank Plc in Greece. In June 2000, the Bank unified its three commercial banks in Greece, creating one of the three largest private sector banks in Greece.

During this period, the Bank established a presence in London – from where the UK operations continue to this day. The product range expanded quickly so that today, whilst undertaking Corporate Finance and Treasury functions for the Bank, the London office, PBUK, also provides the public with mortgages for residential property in Bulgaria and Greece. They are scheduled to expand operations to cover Cyprus and Romania. The bank also offers competitive deposit accounts, UK mortgages for HNW individuals and a foreign exchange service.

In early 2002, Piraeus Bank acquired the Hellenic Industrial Development Bank (ETBAbank). Also, at the beginning of 2002, a strategic alliance agreement for the Greek market was signed between Piraeus Bank Group and ING Group.

In early 2005 Piraeus Bank Group, implementing its strategy for expansion in southeastern Europe and eastern Mediterranean markets, acquired the Bulgarian Eurobank, which was renamed Piraeus Bank Bulgaria. The merger of Piraeus Bank branches in Bulgaria with Eurobank was completed in March 2006. Furthermore, in 2005, it entered into the Serbian market by acquiring Atlas Bank, subsequently renamed Piraeus Bank Beograd, and entered the Egyptian market by acquiring Egyptian Commercial Bank, then renamed Piraeus Bank Egypt. Finally, in 2007, the Piraeus Group further expanded its international presence in the Ukraine by acquiring the International Commerce Bank (renamed Piraeus Bank ICB) and in Cyprus (Piraeus Bank Cyprus) by obtaining a banking license and acquiring the Cypriot branch network of Arab Bank.
 
Has Piraeus Bank UK (PBUK) been affected by the ‘credit crunch’?

PBUK is a branch of Piraeus Bank SA, the Greek banking group. As such, PBUK can create comfort from being part of the Group’s Balance Sheet. Like all Greek Banks, Piraeus Bank is covered by the Greek State Guarantee which is actually slightly higher than the UK Government’s Bank Guarantee. Piraeus Bank has always been run prudently, and therefore had not become involved in ‘toxic debt’. In common with all banks, Piraeus Bank found that borrowing funds over the previous few months had become very expensive as liquidity dried up. However with no hidden off-balance sheet investments PBUK was actually better placed to weather the storm than most of its peers.
 
PBUK’s new deposit product  

Piraeus Bank UK has a new deposit product  aimed at savers with more than £100,000 (or equivalent in Euros or US Dollars) to place on deposit for 1,3,6 or 12 months at competitive rates. For example, if a customer leaves £100,000 on deposit for 12 months, he or she will receive 1.3 % over and above the 12 month Libor rate (1.92% as at 29th April 2009) – which means an all in rate of 3.22%. With the base rate expected to reach 0% by the end of year and many banks already paying close to that, the return is very attractive.  
 
PBUK’s foreign exchange services  

PBUK has its own Treasury department which trades currencies as part of the service that it provides its existing customers and for its own benefit. The foreign exchange service does not have hidden margins added to the dealt rate, commissions or transfer fees. Once the customer has passed the standard account opening procedure, the process is smooth and straightforward.  
 
PBUK’s vision for the future

With its prudent lending, PBUK is enjoying a healthy loan book and can employ its resources in continuing to create value for both the Piraeus Group and its customers.  It intends to safeguard this position further by listening to its customers’ concerns and facilitating their circumstances wherever possible while building customer loyalty for the future. It is also looking to offer ancillary services and products addressing concerns of the moment such as fears of customer deposit security, an attractive interest rate through competitively and fairly priced deposits and a comprehensive foreign exchange service.  
 
For more information please contact PBUK on 0845 603 6538 or visit www.piraeusbank.co.uk.