Alpha Bank, the Greek financial giant with a 10% grip on local loans, aims to lift its share of the market to 12% by 2010, taking advantage of its competitive pricing policy and flexibility, according to its Managing Director in Cyprus, Costas Kokkinos.
In an interview with the Financial Mirror, Kokkinos said that ever since Alpha Bank entered the Cyprus market through its takeover of Lombard Bank that commanded a 4.15% share of loans, the bank’s market share has more than doubled.
“In the past few years, ours is probably the only commercial bank to achieve substantial gains in market share. Our share of loans, at 9.22% excluding the Cooperative credit societies, suggests that Alpha Bank is nowadays a significant player. We believe that, from now on, reference should be made to the island’s ‘four major banks’ instead of the ‘three major banks’,” said Kokkinos.
He defended the exclusion of the Coops as the 300-plus institutions operate outside the regulatory framework of the Central Bank and do not abide with the tough capital adequacy and lending risk criteria of the Central Bank.
If one includes the Coops, the share of Alpha Bank is still a respectable 6.5% and rising.
According to Kokkinos, the key to Alpha Bank’s success is that it offers innovative products that add value at competitive rates combined with fast and efficient service.
“We achieve this by utilising the Alpha Bank Group’s experience and know-how, our local expertise and in-depth analysis of the market”.
Alpha Bank is ranked amongst the 25 largest European banks and has a history of 126 years. It maintains a presence in nine countries through a network of 562 branches and 12,000 employees. Alpha Bank consistently enjoys high credit ratings, particularly in terms of financial strength.
-- New economy
While in general terms, Alpha Bank is the fourth largest bank in Cyprus, in certain hot growth areas often referred to as “new economy sectors”, it is already the third largest and pressing hard on the two major banks.
Kokkinos said that in housing loans, Alpha Bank’s share of the market is 14%, in the construction sector it is 16%, while in foreign currency loans, it’s share is 18.5%, a notch behind Laiki in second place.
“In the new economy sectors that are currently driving the economy forward, Alpha Bank is one of the main players,” said Kokkinos, adding that only when the old economy sectors such as manufacturing are included, then the bank’s share declines to fourth overall.
-- Competitive pricing
The key to Alpha Bank’s success in addition to its flexibility, is its comparatively low 46% cost-to-income ratio, which allows the bank to offer the most competitive rates in the market.
Kokkinos is banking on strong growth in housing loans, including to foreign nationals, mostly British, to continue to drive the bank’s loan portfolio.
More growth is set to come from house equity withdrawals where Alpha Bank has made a head start. With property prices having more than doubled in recent years, there is a lot of room for additional loans from the appreciation in value, provided that the clients have the ability to repay.
With the Cypriot banking market overflowing with retail products for individuals, Alpha Bank is committed to serving all segments of the market.
In terms of small and medium sized enterprises apart from loan products for working capital or capital investments, in 2005 the bank launched "Alpha 500", a current deposit account for companies with high interest rates on the daily credit balance. Moreover, Alpha 500 combines all the features that will cater to a company’s needs, such as overdraft facility, cheque book and credit cards for the company’s directors. In addition, the account can be easily handled through the Internet, utilising the Alpha Express Banking system.
The rationale behind this an account is the simplification of a company’s everyday transactions by channelling them through only one account. The days of requiring a notice, a current and an overdraft account in order to run a business are clearly a thing of the past.
-- Balkan presence
Recently, the Group’s Managing Director, Dimitrios Mantzounis highlighted at a press conference in Athens the strategic goals up to 2010, with the main target for the Group to become one of the leading regional banks in south-eastern Europe, a market of 60 mln inhabitants that is developing rapidly. The Group’s branch network is expected to reach 1,200 locations through which it aims to command a 15% market share including the ‘home’ operations in Greece.
Kokkinos said that Alpha Bank has introduced a unique concept of allowing Cypriots to buy property in the Balkans by asking for the security to be held in Cyprus, thus simplifying procedures for the quick approval of such loans.
“Major corporations have already taken advantage of this, and we expect more people who want to invest in the Balkans to take advantage of our products and our extensive network in the region,” he said.
As for the future plans in Cyprus, Kokkinos said the recent acquisition of 4.600 sq. metres of office space in Nicosia in order to house Alpha Bank’s head office and all support divisions under one roof is testimony of Alpha Bank’s commitment to play an important role in the Cyprus banking industry and serves as a reminder that the Group is one of the largest investors in the Cyprus economy.