The strategy of Piraeus Bank behind the purchase of Iolcus Investments

Of Leonida Stergiou

Piraeus Bank’s business plan envisages doubling total revenue before provisions, to 1.2 billion euros, by 2025, through the creation of new sources of profitability from credit expansion, commissions and capital management.

According to Piraeus banking executives, the contribution of interest income will be greater, however in terms of time it lags behind that of commissions and management, as maturity time is required for the performance of loans.

In this context, it strengthens sources of income, beyond interest, through asset management, bancassurance, real estate and digital services with the creation of a new digital bank.

With the acquisition of Iolcus Investments, funds under management add 1 billion euros to the Group’s already 6 billion coming from mutual funds (3.5 billion), brokerage firm (1 billion) and private banking (1.5 billion) . The goal is to increase the total of 7 billion euros today to 12 billion euros in 2025.

Based on these numerical targets, it seems that Piraeus is aiming for the first place in the capital management sector in Greece, which, based on the latest available data, is held by Eurobank, with Alpha Bank also having a significant market share.

According to Piraeus’ business plan, the Group aims for a market share of 25% from 19% today, investing in the significant growth rate of the Greek mutual funds market, which in 2021 increased by 37%, compared to 17% in SE Europe. Net commissions are expected to reach 55 million euros in 2025, representing a 35% increase for Piraeus.

The emphasis on the development of the new business pillar, i.e. asset management, is also accompanied by organizational changes, as this new activity and its head reports directly to the managing director Mr. Christos Megalou, who has significant experience and comes from investment banking .

Mr. Achilleas Kontogouris takes over the head of the new branch, as Senior General Manager. Mr. Kontogouris has more than 30 years of experience in the investment services industry, is a certified portfolio manager and holds a BA in Economics from Aristotle University and an MBA from INSEAD.

As part of the implementation of this strategy, a new organizational branch, “Wealth & Asset Management”, is being created at Piraeus Bank, with the aim of further developing the wealth management operations of private, business and institutional clients (Private Banking, Asset & Wealth Management) and administrative supervision of the subsidiary companies “Piraeus Asset Management A.E.D.A.K.”, “Piraeus A.E.P.E.Y.” and “Iolcus Investments AEDOEEE”.