Attica Bank: Drastic Changes to Fuel Economic Growth

Growth, consolidation, digitisation, and a customer-centric approach are at the core of Attica Bank’s strategic plan, says Chairman Costas Mitropoulos, who believes Greece’s fifth largest lender will become the country’s first zero-legacy NPL bank by the end of this year.

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GIG: Bearing in mind the changes that have been sparked by the pandemic, what does this mean for the bank’s future strategy, particularly bearing in mind that in June you announced Attica Bank would be doubling its balance sheet by 2022 through the implementation of a revised three-year business plan? Can you tell us about the pillars of this plan? How is Attica Bank planning to differentiate itself in the market with respect to Greece’s four largest lenders?

Mitropoulos: I joined Attica Bank thinking that as a small bank it can be changed drastically over a short span of time. We set out to rejuvenate the culture of the bank, motivate its employees, strengthen the management team, and rebrand the bank. With the COVID-19 crisis things changed fast for everyone. Our goal became to increase the speed and agility of the bank to make it fit within the post-COVID era.

Attica Bank has developed a strategic plan with five pillars in order to double its balance sheet by 2022. First, balance sheet cleansing; second, doubling of the active customer base; third, digitalisation of all customer interfaces and the back office; fourth, rebalancing the cost structure, and last but not least reorienting the bank’s focus towards customer service through a culture change.

The bank is refocusing on funding the ecosystems of large environment, energy, and infrastructure projects. On the retail side, we are concentrating on professional classes.

This bank is partly owned by the engineers’ fund. We thought of extending our reach to also cover doctors, pharmacists, lawyers, all of whom represent small businesses with individual ambitions and aspirations. This dual focus is the new challenge for the bank.

In this effort, Attica Bank will differentiate itself from the competition along three dimensions; by becoming truly relevant to the needs of its customers, servicing them fast and effectively both digitally and physically, and becoming free of legacy NPLs.

GIG: Despite the unfavourable economic landscape, Attica Bank recorded an increase in deposits and lending activity in the first half of 2020. What are your targets for this year?

Mitropoulos: The economic and fiscal environments have become difficult to tread due to COVID-19, and uncertainties will remain at least until the end of the year. Getting our act together and preparing for the 2021-23 period is the management’s prime concern. However, the expected recovery will bring growth opportunities, from which Attica Bank is uniquely positioned to benefit. Our targets for 2020 remain to register growth and clear our balance sheet.

GIG: The COVID-19 pandemic has caused unprecedented changes across all sectors, placing digitalisation and the need for diversification in the spotlight. How is Attica Bank responding to this challenge?

Mitropoulos: Supply chains have been disrupted, dislocated, or relocated as a result of the coronavirus. Tourism was disrupted completely. The mobility industry was hit vastly. There will be significant changes in the way people fly, for business or pleasure. Will we return to normal or continue to rely on video calls, rather than travelling? There will be changes around the world, and the question is how Greece will position itself, particularly in those sectors where we are significant players in any case.

In Attica Bank we were able to have a third of our staff working remotely while rotating a third of the staff at our branches with no hiccups. We have had zero health incidents and no problems in operations.

Digitalisation is a necessity and we need to digitise the transaction side of the business and our back office. As a result of COVID-19 I believe that a new operating model will evolve for the banks.

Nevertheless, this will be a minor phenomenon compared to what the market will be looking like post COVID-19, and how we will eventually reposition ourselves in the market.

GIG: Through the activation of the EU Recovery Fund, Greece could benefit from an estimated €32 billion. How do you believe that Greece can best seize this moment to enable the economy to bounce back prioritising sustainable growth and the attraction of foreign investments? What role can we expect Attica Bank to play in this respect, particularly regarding the attraction of private investments?

Mitropoulos: Personally, I think attracting large foreign direct investments (FDIs) into Greece is something that never happened in the past. FDIs in Greece were consistently less than 10% of total investment, even in high tides. Up until now we have been generating a lot of discussion about investments, but little money has been flowing in.

What we need is to focus on being competitive, rather than simply attempting to attract investments. If you are competitive, you automatically attract capital. So, the real issue is establishing what we can do to improve our competitiveness, and determining the kind of competitive model we should follow.

First, we need infrastructure investments because this is the best way to mobilise the entire economy; with its high economic multipliers, it gives you time to adjust. The second thing is larger companies. The size of enterprises is important. You cannot easily be competitive in the international markets as a small company. It’s very difficult to finance research, development, and marketing when your size, in terms of revenue, is say €30 million per annum. You lack the critical mass of brains for research and development and the critical presence to market your products internationally.

“We thought of extending our reach to also cover doctors, pharmacists, lawyers, all of whom represent small businesses with individual ambitions and aspirations.” Copyright: Syda Productions/

Interestingly enough, in countries of similar size to Greece, like Portugal or Belgium, SMEs work for large companies located across the rest of Europe. For example, Portuguese companies are subcontracting for Dutch, German, French, and Italian companies. They don’t need to fund marketing. They have a different production model. Graduating companies to international competitiveness should be, in my view, the way forward. That said, there are a lot of excellent SMEs in Greece that could become large companies. You have to identify those players, which exist across all sectors, and support and motivate them to grow larger in size.

GIG: The Greek government has taken a number of measures to protect borrowers in the wake of the pandemic, and has called on the banking sector to support economic recovery efforts. What should we expect from Attica Bank as far as the financing of small and medium enterprises (SMEs) and entrepreneurs is concerned?

Mitropoulos: We have developed special products to channel liquidity provided mainly by the state, but also new products to fuel growth. Our focus is on enabling SMEs to transform. This includes SMEs executing large infrastructure projects linked to concessions by the Greek state, developing renewable energy, and putting money and efforts into environmental protection.

Focusing on environment, energy and infrastructure serves the national strategy by mobilising capital, through green bonds for example, and supports the bank’s strategy to fund SMEs in the ecosystems of such projects. By working closely with our customers we can assist them in adjusting their business models to get more focused on exploiting their key competences and becoming internationally competitive.

GIG: While the Greek banking sector had ambitious targets in 2020 for the reduction of the NPL volume, the effects of COVID-19 have hampered goals, and increased the likelihood of an increase in bad loans. What does this mean for Attica Bank’s NPL reduction targets and what steps is the bank taking in this respect? What are your thoughts on the creation of a ‘bad bank’?

Mitropoulos: Attica Bank plans to remove all legacy NPLs from the balance sheet through a third securitization by end 2020, thus becoming the first zero legacy NPL bank in Greece. Our exposure to COVID-19 stricken sectors and companies is limited and we do not expect a surge in such bad loans. Nonetheless, we have to protect our capital base and enlarge our portfolio with new healthy loans.

The ‘bad bank’ instrument is a necessity for handling large scale NPL stocks both in Europe and in Greece. A discussion is taking place and I hope soon we will be able to see the instrument applied to removing NPLs from the banking system altogether.

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