Eurobank expects profits of 150-200 million euros during 2021 - 2023 from operations in southeast Europe, while significant investments are in progress, mainly in technological infrastructure, which will create additional synergies for the group in coming years.
Despite the aggressive divestment of Greek banks in SE Europe, Eurobank managed to maintain a significant international footprint, with a presence today in four countries and total assets of 17 billion euros.
With a strong presence in Bulgaria and Cyprus, a remarkable presence in Serbia and the traditionally strong relationship with Luxembourg, the group has more than 300 branches in the above countries, employing a total of 4,700 employees. It’s presence in Serbia is weaker, with Eurobank considering a number of options to tighten its grip on the country, including acquisition opportunities.
The group's total investment in the above markets amounts to 1 billion euros while investments in digital systems are in progress, with the installation of the Temenos platform in Cyprus, Luxembourg and Bulgaria that will allow the group to operate under a single platform.
The common platform will highlight significant economies of scale by allowing Eurobank to operate more efficiently by strengthening its presence in neighboring markets.
Activities abroad contribute about 30 percent to pre-forecast profits, while the dividends received by Eurobank from its subsidiaries abroad between 2017-2019 amounted to 200 million euros. In the first quarter of this year, profits from activities abroad amounted to 32 million euros.
How the battle of the Balkans was won
The timely redeployment of the group's forces abroad contributed significantly to the effective management of the crisis that led to the divestment of Greek banks from SE Europe. Since 2010, the management of Eurobank, anticipating the difficult conditions ahead, had decided to adjust its strategy.
The key was to pull out of large markets, such as Poland, Turkey and Ukraine. Bank sources tell Business Daily, that staying in these countries would have been very costly amidst high uncertainty.
So it was decided that the bank would leave these countries and focus on markets where it had a strategic advantage, such as Cyprus and Bulgaria.
With the funds from the sales of subsidiaries but also funds released from supervisory requirements, Eurobank proceeded to the complete consolidation of loan portfolios and the strengthening of the banks with human resources and technological infrastructures.
Today, foreign subsidiaries are well capitalized, possess strong liquidity, high quality loan portfolio and successfully compete with major European banks by strengthening their positions in local markets. Great importance is given, in addition to the traditional banking operations and the strengthening of the range of products offered, to the expansion of operations in wealth management.