Hellenic Bank appoints new GM in Greece

Hellenic Bank Pcl (HB) has appointed Nearchos Marangos, a Cypriot career banker and until recently the second highest ranking officer to head its expanding Greek operations

The former General Manager M. Tagaroulias who retires in March has been on leave of absence. The shake up was announced by HB CEO Makis Keravnos, who told the Financial Mirror that Marangos is on an annual contract and will be responsible to deliver the desired turnaround in the Group’s Greek operations, which during 2006 remained heavily in the red, despite assurances a year ago by Tagaroulias that “Greece will achieve break even in 2006.”

Although Hellenic Bank’s operations in Greece reported a CYP 1.8 mln or EUR 3.1 mln in operating profits in 2006 compared to CYP 1.8 mln operating losses in 2005, a CYP 5.9 mln provision for bad debts forced the net results of the Greek operations to show a net loss of CYP 4.1 mln or EUR 7.15 mln compared to a net loss of CYP 10.1 mln in 2005.

The provision for bad debts in Greece fell from CYP 8.3 mln in 2005 to CYP 5.9 mln in 2006, but the loan portfolio continues to be hammered by low quality loans given in previous years, which the new Management team headed by Makis Keravnos is attempting to correct.

Keravnos admitted that the former GM of the Greek operations had promised break even status by 2006, something that was not achieved, but the fact that at operational level, the operations have made a spectacular turnaround gives rise to optimism that the desired target of break even by the first quarter of 2007 will be met.

 

Branch expansion

Keravnos revealed plans to open 3 branches during 2007, increasing the number of branches in Greece to 28, but did not go into detail when asked by the Financial Mirror to state the critical mass at which the Group would be comfortable with its presence in Greece, or the share of profits that the Bank hopes to generate from its Greek operations by 2009.

The Greek financial web site euro2day.gr citing its own sources revealed that Hellenic Bank will open 2 more branches in 2008 and a further 3 in 2009.

During 2006, Hellenic Bank deposits in Greece were up 19% YoY while advances were up 26%.