Shareholders of Astrobank are ready to pursue an expansionist policy so as to further boost the bank’s position in the Cypriot market, the group’s managing director George Appios told Forbes Cyprus.
After the merger of operations with USB Bank, Astrobank’s assets will total €2.1 billion. Appios said that shareholders are willing and ready to boost the bank’s capital base if necessary. “We are interested in every bank on the market, we are open to every attractive option,” he comments.
What is your assessment so far regarding the impact from the change in the bank’s share structure? Has it played a positive role on the bank’s transformation?
Every new beginning has its difficulties. What is essential is to have a plan and a direction. When there is a strategy, meticulous planning and effective implementation and monitoring mechanisms, things become much easier. Undoubtedly, we faced many challenges, but with methodical work we managed to lay solid foundations to achieve our strategic objectives and to further expand and entrench AstroBank in the Cyprus market. Our foreign shareholders injected experience, expertise and a broad network of relations. Today, the bank offers very competitive products and services such as the successful consumer products ‘Fast Cash’ and ‘Fast Auto’ which have become established as reliable solutions for quick and effective service. Moreover, we pressed ahead with a radical renewal and renovation of our branches so as to reflect the bank’s new strategic approach, offering visitors prompt and quality service. In addition, capitalising on the international experience and connections of its new shareholders, AstroBank set up a Shipping Desk service and will soon be establishing a Capital Markets Desk with the aim of attracting new clients from Cyprus and abroad. We have also entered into a strategic cooperation with Crescendo Capital, a Swiss financial advice and wealth management company, through which we offer clients consultative services in Private Banking and Wealth Management. As a result of these actions, there has been a 10% increase in our clientele and we have given more than €220m in new loans since January 2017.
What strategic changes are expected after the absorption of USB Bank?
The agreement to merge our operations with USB Bank is very important as it significantly bolsters our position in the Cyprus market. It will nearly double our size, making the merged bank stronger and more competitive with total assets exceeding €2.1 b. Moreover, we believe that the expansion of our activities contributes to Cyprus’ overall economic growth and boosts its image as a regional centre.
Is AstroBank interested in acquiring the operations of the National Bank of Greece (Cyprus) or is this just a rumour?
Further expansion of the bank is not just one of our main objectives, but propels and determines our actions and orientation. The strategic objective of expanding can be achieved organically or through acquisitions. We are ready and have the capability to make the best of every opportunity that arises that satisfies our investment plans. We are interested in every bank on the market and we are open to every attractive option. But we must be careful. What I can reiterate is that we are interested in growth through mergers and acquisitions. We do not have a specified quantitative target we want to achieve, but we will give careful consideration to any opportunity that arises.
As regards the bank’s organic growth, in which sectors do you aim to further promote products?
One sector in which we are investing parallel to our other activities is that of innovation. Our size gives us flexibility which is a significant advantage in this sector. We will continue to offer traditional banking services such as corporate lending, retail and private banking etc, but always adapted to our way of operating. Moreover, we aim to significantly boost our private banking platform as this is an area we know very well and consider that a lot can be done to offer an upgraded service for our clients. At the same time, we consider that regional and international business activities are one of our advantages as we have a wide network of contacts, both on an individual and a collective basis.
Are you concerned that banking supervision is becoming all the more stringent at European level and that the cost of satisfying all these requirements is constantly rising?
All the banks and their shareholders are protesting about the increased cost of compliance and supervision. The supervisors are constantly raising capital requirements. In combination with the higher cost of compliance, the protracted period of negative euro interest rates, as well as the acute competition from non-supervised institutions offering banking services, exert pressure on profitability and on returns on investors’ capital. Undoubtedly, banks now face a tougher supervisory environment since the requirements of the banking union and of the single European banking supervision are much bigger. Thousands of pages of new rules have been added, while new ones continue to be issued. But all these improve the banking system and in the long-term will make it safer and more effective.
What is the bank’s target for the next five years? Can AstroBank become a systemic bank and compete with the biggest banks or do you plan to operate more as a new-old challenger bank?
Our primary aim is to be protagonists in the local market, adding value to our clients by offering new services and products. We believe that what makes AstroBank stand out from the competition is the profile of its investors and board but also the basic elements of our corporate culture such as speed, innovation and immediacy. Our aim is to offer innovative services and products, adapted to our corporate philosophy, which can satisfy the needs of the Cypriot market.
From Forbes Cyprus