By Hamza Hendawi
ALPHA Credit Bank, Greece’s second largest privately-owned financial institution, yesterday served notice of its intention to be a major player on the island.
A month after its takeover of the island’s Lombard NatWest Bank, Alpha Chairman and Managing Director Yannis Costopoulos yesterday told reporters in Nicosia that his bank’s move into Cyprus was a “natural step” after its expansion in the European Union and the Balkans.
Citing some of Alpha’s successful products in the Greek market, Costopoulos appeared confident of his bank’s prospects in the highly competitive Cyprus market.
“When you have five per cent of the market you are bound to grow, no matter how powerful the opposition is,” he said, alluding to the size of Lombard NatWest’s market share in Cyprus.
Alpha in September bought a 75 per cent stake that had been held by Britain’s NatWest Group in the island’s Lombard Natwest Bank. No price was officially given for the transaction, but various press reports have put it at between £35 million and £40 million. The remaining 25 per cent stake in the bank is held by Cypriot investors.
Lombard Natwest had 24 branches and posted pre-tax profits of 3.2 million pounds in the year ending September 1997.
It has also been known to be particularly strong in the areas of corporate banking and foreign currency management and to be active in the island’s lucrative offshore sector.
Alpha boss Costopoulos, accompanied on his current visit to Cyprus by a small army of Greek journalists and the bank’s top brass, conceded that, while the bank’s competitiveness would help it capture a bigger slice of the Cyprus market, expansion would not be easy.
The bank of Cyprus and the Cyprus Popular Bank, both with rapidly expanding and profitable operations in Greece and Britain, have between them 70 per cent of the Cyprus market in terms of deposits. The two are also major players in, among other things, insurance, factoring and leasing.
“This is the first serious Greek investment in Cyprus,” said Costopoulos, the Alpha chairman. It took Alpha three years of careful efforts and planning before NatWest’s share in Lombard NatWest Bank was clinched, he added.
NatWest’s policy of withdrawing from retail banking outside the United Kingdom, he said, provided Alpha Bank with an opportunity to break into the Cyprus market that might not have been readily available otherwise.
Alpha officially began operations in Cyprus on October 1.
He said the bank could seek a listing on the Cyprus Stock Exchange, but he would not give a date. “We must be here for a year and show some results before we can attract investors,” he said. Alpha and its subsidiaries are listed on the Athens Stock Exchange.
Alpha has no plans to bring Greek nationals to work at the bank in Cyprus, Costopoulos said. “On the contrary, we have enough good people here that we could use elsewhere in the bank.”
Lombard Natwest Bank employed 300 people on the island. Director of the Board Michael Colocassides told yesterday’s news conference that the bank’s top management, its structure and staff would remain unchanged.
Colocassides, who held an identical position in Lombard NatWest, is among the top shareholders of the 25 per cent stake retained by Cypriot investors after Alpha’s takeover.
