Foreign banks open offices in Greece

Of Leonida Stergiou

Apart from JP Morgan, which already has a presence in Greece, at least three other major investment banks plan to open offices in Athens, obtaining the respective licenses from the Bank of Greece.

These are Goldman Sachs, Bank of America, Deutsche Bank, while the thoughts from Nomura are at an earlier stage.

According to information from market executives who are able to know or have been spotted, the plans of Goldman Sachs, Bank of America and Deutsche Bank are at an advanced stage, while Nomura is in the exploratory phase.

While JP Morgan is already looking for new executives for Athens, the rest have not yet made the final decisions or about the exact time and way. However, exploratory contacts with Greek bank executives, as well as discussions with their executives abroad about the prospect of being transferred to Athens have taken place.

Also, information confirms that exploratory contacts have been made on legal and other issues of custody, strategy at European level, competent supervisory authorities, etc.

The main goal is the development of investment banking (treasury business banking), such as bond issues, and, secondarily, wealth management, ie asset management and private banking.

A common strategy behind these plans is their presence in a market, which does not have a developed investment banking, in relation to other European centers, and is in a strategic position, in terms of interconnection of the markets of Southeast Europe.

In the final decisions they measure the low cost, in relation to other European centers (salaries, rents, cost of living), the fact that Greece is a member of the Eurozone, the forecasts for high growth rates and general growth of the economic cycle, but also the benefit from the Recovery Fund and other European resources, where Greece and the other countries in the wider region receive the largest share.

Aim for deals and the development of the wider area

According to market sources active in the sector, these foreign investment banks envisage an increase in business deals and alternative financing of large business and investment projects in Greece, but also in the countries of Southeastern Europe, as well as in the accession countries of the euro area. .

The Greek market does not have a developed investment banking, on the one hand because for many years, due to the crisis, there were no deals, and on the other hand, the business model of the Greek systemic banks moved more in the so-called retail banking.

Of course there is corporate and wholesale banking, as well as wealth management, which is clearly more developed. However, in terms of investment banking, which mainly concerns large deals, IPOs, bond issues, mini bonds, capital increases, etc., the revenues of domestic systemic banks amount to approximately 150 million euros.

Moreover, even for themselves or for issues or deals of their clients, they cooperate with large investment banks abroad.

Wealth and property management

Investment banking is mainly associated with business transactions. However, it is directly related to the sale of eg bond loans, etc.

This is undertaken by wealth management, which includes private banking and asset management that undertake the part of sales eg IPOs to large individuals or institutional investors.

The Greek market

The private banking and asset management of the Greek systemic banks is developed and develops more with the rise of the work of insurance companies, mutual funds and mainly with their international activities.

The funds under management in Greece by the private banking of the four systems are estimated at just over 13 billion euros, while if asset management and the corresponding international activities (Cyprus, Luxembourg, Britain, Balkans, etc.) are added, then it is estimated at around 25 billion . euro.

From bank executives who are close to the developments or who have already been surveyed by foreigners who plan to come to Athens, for the large investment banks it does not seem that the main goal is to get a share of the four systemic, because the market is relatively small for their sizes. Also, they already have Greek customers (individuals, businessmen, shipping, etc.) abroad where they operate. Obviously, there will be mobility, but their main goal is to develop a new market through investment banking.

Mobility of bank executives

Mobility, however, will exist in bank executives. Already, on specialized websites for locating executives, some of these banks are already looking for Greek executives.

They are not looking for executives, but mainly middle managers with great access to large private and institutional portfolios and to have a proven high sales history.

This is also confirmed by the market, as industry executives are approached by representatives of the foreign banks themselves. They mainly come in contact with executives under the age of 45-40, with large customer accounts and sales skills.

In terms of salaries, they are expected to be higher for the Greek data, but much lower for the European ones. Besides, one of the reasons they come to Greece is the reduction of costs.

It all started with Brexit, when big investment banks headed to Paris, Luxembourg, Germany, Switzerland and even Italy. There, there were mergers of units and the remaining executives and top executives moved to London with salaries and total earnings for at least the first one to two years. Adjustments were then made.

Somehow it seems that Greece will work for them once the final decisions are made.

The key executives will come from abroad with the salaries there, for example for the first year, covering, however, a lower cost of living, with the adjustment to the salary data of Greece in the coming years.

The rest of the executives can be senior or junior from abroad and Greece, with lower earnings from European centers, but larger than those of Greece today in order to attract talent and even brain drainers from abroad.

Finally, the plans speak for the opening of offices and presence as there is for example today of JP Morgan, and not for the opening of banks and branches. The offices will be framed by a small group of executives.