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Alpha Bank: We are not looking for quick profit in Bulgaria

11 March 2010 / 12:03:03  GRReporter
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"In the coming years I expect the increase of pressure on public finances in Bulgaria,” said in an interview with Maria Spassova the chief economist at Alpha Bank Michalis Mazourakis, who claims that right now is not the good time for Bulgaria to become a member of the eurozone.

    - How does economic crisis in Greece affect the performance of Greek banks abroad? 

    - The poor economic situation of Greece influences the performance of Greek banks abroad. We went through a major recession in 2009 and in Bulgaria, the GDP fell by about 5,1% and therefore the demand for loans in Bulgaria fell sharply. Before about a year ago the credit growth was about 32% and now it is below 4 percent. So just like in all Europe the demand for loans has fallen in Greece and in Bulgaria. The question is now how much loans do banks give, but because of the recession, the question becomes how much is the demand for loans, because it is falling sharply. We do not have different policies for geographical reasons. Whatever our policy is in Greece, it is the same in Bulgaria as well. We will continue to give loans to our good customers, those that are likely to pay the loans back, and this is true for both Greece and Bulgaria, without any discrimination. Of course, we hope that the situation will quickly improve, because Greek banks are currently experiencing a problem with financing from abroad, although funding from abroad is not as big. The ratio of loans to investment in Greek banks is very small, it is about 113%, including loans and investments not only in Greece but throughout Europe. Therefore we depend to a lesser extent by funding from international markets. However, international markets, because of the existing problem with Greek government bonds, offer very bad credit conditions. Currently there is a refrain from lending to customers of all Greek banks, but that does not mean that we do not give loans at the moment. We do give loans but we are simply more careful than usual when the situation is better. 

    - Alpha Bank has been on the Bulgarian market for few years now. What is your experience there? 

    - Our experience is positive, because we believe that Bulgaria's economy is very strong regardless of what happened in 2009. The country has very good development opportunities. We are a Greek bank that wishes to be represented to the north, where there are many Greek investments and they are developing dynamically. Of course, we are not a bank, which searches only for quick advantage. When we invest, it has a long-term goal. We want to be in Bulgaria for another 10, 20, 30 years and we want to develop as we developed here in Greece. I.e. Our presentation in Greece is stable and the fact that currently we are experiencing some problems does not mean anything. If you look at Greece during the 90s, then we had many difficulties - continuing devaluation of the Drachma, but we recovered. Of course, in difficult times like today, we want to be careful. Until September last year we opened 100 new branches in Bulgaria, but since the crisis came, we stopped building new branches. We currently have 120 branches in Bulgaria, employing approximately 1000 people. We estimate that it is inappropriate to expand right now not only because there is no demand, but also because there is great uncertainty. But I have a feeling that sooner or later we will continue to expand in Bulgaria, when better times come. 

    - How do you assess Bulgaria's chances to join the eurozone? 

Tags: Alpha Bank Bulgaria Greece economy Eurozone EU
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