New look Alpha seeks dominance with larger portfolio
THE COUNTRY'S LARGEST PRIVATE BANK IS PURSUING A STRATEGY OF OVERSEAS EXPANSION TO SURVIVE IN THE ENVIRONMENT OF A CONVERGING EUROPEAN ECONOMY, AND SEES PLENTY OF ROOM FOR GROWTH AT HOME

GEORGE PROVOPOULOS Chief Economist for Alpha Bank

Alpha Bank is Greece’s largest private bank. With a network of 440 branches across the country and a 20 percent market share, it is a high-profile institution offering a wide variety of products and services to both business and personal customers. It is also one of the chief sponsors of the Olympic Games in 2004.
The new-look company was formed as a result of the merger in 2000 between Alpha Credit Bank and Ionian Bank. Though plans for a merger this year with the state-owned National Bank of Greece were canceled, this has not harmed long-term growth prospects.
According to the bank’s Chief Economist, George Provopoulos, Alpha Bank’s goal now is to raise its market share to about 23 percent within the next few years, and to become the premier bank serving south-east Europe. He adds the bank is unlikely to chase further acquisitions, choosing instead to develop through organic growth.
The banking market in Greece is far more dynamic following liberalization in the early 1990s which freed the system. Previously, banking activity was constrained by detailed regulation from the Bank of Greece and the government.

“After liberalization, we had an explosion of mergers and acquisitions,” says Mr. Provopoulos. “New banking institutions were created, while a number of banks were privatized, such as Ionian Bank, which was acquired by Alpha Bank in the biggest deal in the banking sector.”
Another important force for change is the convergence of the Greek economy with the EU and entry to the eurozone. This brings with it both threats and opportunities, he says. “We are in the premier league now amid larger and economically stronger European countries. To survive in this arena, we have to grow faster and become more competitive. We are optimistic, though.”
Alpha Bank has developed a thriving network throughout the Balkan region, where it maintains a presence in Bulgaria, Albania, Macedonia, Romania and, soon, Serbia. It is also present in Cyprus.

A NATIONAL ROADSHOW is taking Alpha Bank’s ‘Panorama of Olympic Sports’ campaign to the people to whip up enthusiasm and publicize some of the event’s lesser known sports.

“We have followed a strategy of focused expansion in the region since 1994,” says Mr. Provopoulos. “We have concentrated on gradually expanding our portfolio of financial services. We are now in a position to offer commercial banking, investment banking, leasing and brokerage activities, as well as insurance.”
He adds that, because of the old mentality in the transition states – those moving from a communist to a market economy – Alpha Bank has not sought any large-scale acquisitions. Rather, it is looking at building from a small presence to expand slowly after understanding the traditions of the local people.

The bank also sees plenty of opportunities for growth in Greece itself, a country which has outstripped much of Europe in terms of recent growth rates.
For the next five or six years, Mr. Provopoulos thinks that outside forces – such as the financial support from the EU for investment in infrastructure and the Olympic Games in 2004 – will provide the momentum.
“Moreover, the drastic fall in interest rates over the past few years will continue to exert an impact on the economy in the years to come,” he says. “About five years ago, a Greek company could borrow from a bank at the rate of 20 percent. These days a rate of seven or eight percent is commonplace. This is a dramatic change in only a few years.”
One of the bank’s other current objectives is the promotion of the Olympics in the run-up to 2004. It has started a tour of Greek cities under the banner ‘Alpha Bank Panorama of Olympic Sports’ to promote some of the lesser-known events of the Games and whip up national enthusiasm.

Mr. Provopoulos believes that Greece has come through the worst of the adjustment process from the early 1990s onwards. It is a stronger country that will underpin development work in neighboring states and beyond.
“I think that Greece is quite different from what it was in the past,” he says. “It is now a member of the eurozone and that means economic stability. Greece is between two continents. It belongs to Europe, but it is also a Mediterranean country. As such, Greece can serve as a gateway to south-east Europe.”
He also identifies Greece – and especially Alpha Bank – as an important strategic partner for any potential U.S. firms looking to access the region for the first time.
“American companies wishing for a presence in the Balkans can do that though Greece, where good partners can make a difference,” he says.