National Bank of Greece

This article is about the largest commercial bank in Greece. For the central bank of Greece, see Bank of Greece.

National Bank of Greece S.A.
Εθνική Τράπεζα της Ελλάδος Α.Ε.

Type	Anonymi Etairia Public company
Traded as	Athex: ETE LSE: NBGA NYSE: NBG
Industry	Financial services
Founded	1841
Headquarters	Athens, Greece
Key people	Apostolos Tamvakakis (CEO), Vassilios Rapanos (Chairman)
Products	Retail, investment and business banking, asset management
Revenue	€4.639 billion (2010)
Profit	€405.5 million (2010)
Total assets	€120.74 billion (2010)
Total equity	€10.91 billion (2010)
Employees	36,380 (average, 2010)
Website	www.nbg.gr

The National Bank of Greece (NBG; Greek: Εθνική Τράπεζα της Ελλάδος) is the oldest and largest commercial banking group in Greece. The group has a particularly strong presence in Southeastern Europe and the Eastern Mediterranean. It owns subsidiaries in over 18 countries, including Bulgaria, Cyprus, Egypt, Republic of Macedonia, Netherlands, Romania, Russia, Serbia, South Africa, Switzerland, and Turkey.

Jean-Gabriel Eynard and Georgios Stavros founded NBG in 1841 as a commercial bank. Stavros was also elected as the first director of the Bank until his death in 1869. From NBG's inception until the establishment of the Bank of Greece in 1928, NBG enjoyed the right to issue banknotes. When the Athens Stock Exchange was founded in 1880, NBG immediately listed on the exchange, a listing it has retained to the present. Since 1999, NBG is also listed on the New York Stock Exchange. The NBG Group is involved in the investment banking services, brokerage, insurance, asset management, leasing and factoring markets.

The Bank's branch and ATM network, the largest in Greece (568 domestic banking units and 1370 ΑΤΜs), effectively covers the entire country. It is developing and expanding alternative distribution channels for its products, such as mobile and internet banking. Today, after recent acquisitions in South Eastern Europe the Group's network overseas includes 868 units. Over 9 million deposit accounts and more than 1.5 million lending accounts are held with NBG.

History

NBG was founded in 1841 in Athens, making it the oldest bank in the country. It was not government-owned from its inception but had the right of note issue, which it lost in 1928 when the newly-established Bank of Greece took over as the country's central bank. In 1899 NBG acquired the Privileged Bank of Epirus and Thessaly (Pronomiouchos Trapeza Epirothessalias). Andreas Syngros had founded the bank in Volos in 1882. Unfortunately, the bank was unable to recover from his death and from the Greco-Turkish War (1897).

The old headquarters building of NBG in Athens

National Bank of Greece Building in Makariou Avenue, Nicosia

The arrival of the 20th Century saw NBG begin its international expansion. In 1904 NBG established Banque d’Orient, together with Nationalbank für Deutschland, which almost immediately withdrew from the venture. The Greeks kept the branches in Thessaloniki, Smyrna and Alexandria. Three years later, NBG chose Cyprus as the location for its first branch outside Greece.

NBG became government-owned during the First World War when NBG refused to finance new military equipment for the Greek government. The government then passed a law that permitted the government to appoint its own people to the Bank's board.

In 1919 NBG acquired the Bank of Crete (Trapeza Kritis). However, in 1923 the Treaty of Lausanne provided for a compulsory exchange of populations between Greece and Turkey, leading to the departure of the Greeks from Smyrna. As a result Banque d’Orient closed its branch there.

The 1930s saw further international expansion. In 1930 NBG and Bank of Athens combined their activities in Egypt into a joint subsidiary, Banque Nationale de Grèce et d’Athènes. Two years later, NBG acquired Banque d'Orient (Trapeza Anatolis). Then in 1939, on the eve of the [{Second World War, NBG established a subsidiary in New York, Hellenic Bank Trust Company.

During World War II, Deutsche Bank managed NBG for the German Occupation.

In 1953 the Greek government forced NBG to merge with Bank of Athens to form National Bank of Greece and Athens, a name later shortened back to National Bank of Greece. The merger gave NBG control of the various subsidiaries of the Bank of Athens, including the South African Bank of Athens (est. 1947), which NBG still owns.

In 1960 Egypt nationalised all banks in Egypt, including Banque Nationale de Grèce et d’Athénes, which it merged into National Bank of Egypt. In 1965 NBG acquired Trapeza Epagelmatikis Pistis. The next year bank governor Georgios Mavros founded the National Bank of Greece Cultural Foundation.

In 1978 the Greek government permitted the formation of Arab Hellenic Bank with 49% Arab ownership, as an exception to its prohibition on foreign banks owning more than 40% of the equity of a Greek bank. NBG held 51% and provided most of the bank staff. The Libyan Arab-Foreign Bank and Kuwaiti Investment Organisation held 40% between them while other Arab investors held 9%. That same year NBG opened a branch in Cairo.

In 1994 NBG incorporated its branches in Cyprus into a subsidiary: National Bank of Greece (Cyprus). The next year the Greek government dissolved the insolvent Arab Hellenic Bank at a cost to Greece's Deposit Guarantee Fund of Euro 1.5m in payments to depositors. In 1998 NBG merged with the National Mortgage Bank of Greece (Ethniki Ktimatiki Trapeza Ellados), itself the result of the merger of the National Mortgage Bank and the National Housing Bank of Greece.

With the collapse of Communism, NBG took advantage of the opportunity to expand into the Balkans. In April, 2000, in a joint deal with the European Bank for Reconstruction and Development (EBRD) and IFC, NBG acquired a majority stake in Stopanska Banka (Skopje, Republic of Macedonia). In July National Bank of Greece acquired 89.9% of the United Bulgarian Bank (UBB).

In 2002 NBG merged with ETEBA – National Investment Bank for Industrial Development, but NBG's attempted merger with Alpha Bank fell through. The next year, NBG bought Banca Romaneasca, a Romanian bank, and currently holds 88.7% of all outstanding shares. Banca Romaneasca has 90 branches.

However, while it was expanding in the Balkans, NBG was retreating in North America. The first move occurred in 2005 when NBG sold all its operations in Canada to Bank of Nova Scotia. The next year NBG sold its US arm, Atlantic Bank of New York, to New York Community Bancorp for US$400 million (€331 million) in cash. It then used proceeds from the sale to help finance further acquisitions in southeast Europe.

In 2006 NBG acquired 46% of the shares of Finansbank in Turkey, a share that it increased in 2007 to 80%. Hüsnü Özyeğin reported in the initial press conference when NBG announced its 46% share purchase that he would have "loved to have been offered National Bank of Greece shares instead of cash, however there were no shares available" (outside of the current shares floated in the free market). Still in 2006, NBG acquired 99.44% of Serbia's Vojvođanska Bank for €385 mn.

At home, In 2005, as part of the NBG Group's ongoing effort to improve its portfolio structure and effectively respond to changes in the domestic and international markets, the Boards of Directors of National Bank of Greece S.A. and National Investment Company S.A. decided to merge the two companies through absorption of the latter by the Bank. Two years later, NBG merged with d National Management & Organization Co (Ethnokarta). At the time, NBG already held 100% of National Management & Organization Co (Ethnokarta) shares. Also in 2007, NBG concluded the acquisition of P&K Investment Services SA. The acquisition created the largest provider of brokerage and investment services in Greece. NBG plans to expand this business to all countries where NBG has a presence.

On 18 February 2011 NBG made an offer to buy Alpha Bank for 2.8 billion Euros.

See also

• Inter-Alpha Group of Banks
• List of Greek companies
• Finansbank

External links

• Official website