Emporiki Bank to launch a range of productivity and cost saving measures.
Redress current situation and create the foundations for future success.
Athens, 25th June, 2009 - Emporiki Bank Group today announced a wide range of measures and actions aimed at improving productivity and adapting Emporiki s cost base to the new economic environment. The timeframe for these activities spans the period 2009-2011 with the key objectives being to stabilise and redress the current situation, restore margins, reduce the cost base, limit risk exposure and create the foundations for future longterm success.
Greece has been particularly hardly hit by the current economic climate leading to a downgrading of the Greek economy. In particular the financial sector has suffered and it has had a material impact on all Greek banks in the last year, and actually worsening in the first quarter of 2009. This crisis revealed all the more necessary to implement structural reforms, essential to the foundations of a future success.
In order to counteract the effects of this context and to tackle Emporiki s productivity issues, Emporiki s new management team will start to implement a number of measures:
. Reduction of G&A cost by about 21 per cent by 2011.
It will include centralisation of purchasing functions to increase economies of scale and optimize purchasing power, improve supplier management and develop a preferred supplier roster with a view to secure more favourable commercial terms, implementation of new policies spanning telecom, travel expenses and utilities.
. Restructuration and repositioning of the branch network.
Review and repositioning of the existing branch network to focus on areas with high potential. This will lead to some branch closures focusing on non-profitable locations, those with low profit potential or in over-serviced areas. In total 57 branches are expected to be closed, 33 relocated to more prosperous sites, whilst up to 22 branches may be opened in high potential growth regions like Attica and Thessaloniki. It will also review and where appropriate renegotiate branch lease agreements and consider sale-lease back options if commercial viable.
. Co-locate all HQ functions to improve efficiency.
HQ to relocate in order to co-locate staff in one location in an Athens suburb, staff is currently spread between 20 buildings throughout Athens; this will lead to reduced running costs, improved efficiency, security and productivity as well as transversal team working and quicker decision making. A decision as to the future of vacated premises to be made shortly depending on market conditions.
. Staff reduction trend initiated in 2007 to continue.
A further 1500 staff will be leaving the company within a three year timeframe through voluntary measures,. Going forward, resources will be firmly focused on commercial and client relationships and with selective recruitments in order to upgrade skill set.
. Industrialisation of credit processes and procedures.
The industrialisation and centralisation of the credit process and procedures have already shown a direct impact on the doubtful credit volume of some loan categories (credits in arrears by more than 90 days significantly decreased).
. A review of human resource processes
A major effort will be made to train and motivate staff to improve skills and to facilitate culture change towards a more productive and commercially minded organisation. This effort will be centred around five initiatives:
New performance-based appraisal system linked to individual and overall bank objectives.
Improved internal mobility procedures to ensure right person in right position.
Career management and staff development initiatives to get the best from each staff member.
Evaluate compensation and benefit structure to fully align with commercial and profitability measures.
Review of recruitment processes to upgrade quality and meet specific and future needs of the group.
Commenting on the measures, Alain Strub, chief executive of Emporiki Bank, said: "Credit Agricole S.A. is committed to Emporiki Bank and to the Greek market. These initiatives, which enjoy the full backing of our majority shareholder, should allow Emporiki to return to profitability by 2011. We will achieve this through improved internal processes, further strengthened risk management, and plan to bring the cost of risk down to below 100 basis points, by cutting the cost base by at least 13 per cent. This will lead to an improvement in the cost income ratio and bring it closer to Credit Agricole standards and local competition level. At a later stage we will also aim to review our commercial performance and even better target our customers needs."
. Press Inquiries:
Christina Dimoudi, Press Officer
+30 210 328 2706
dimoudi.c@emporiki.gr