Mr Panos Tsoupidis, President

Interview of the Greek Postal Savings Bank President Mr Panos Tsoupidis by “City Press” daily newspaper (September 2005)

Is Greek Postal Savings Bank on the way for share listing and privatization?

The shareholder’s policy has been clear from the very beginning. During the first half of 2006 we are about to move on a share listing by selling 20-30% at first, according to the market’s conditions. We will apply to Greek and foreign investors, considering that according to the Stock Exchange’s regulations for the dispersion of shares, there will be no strategic investor.

What kind of revenues are expected by the Government and up to which point will you apply to foreign institutional investors?

It depends on the Greek Postal Savings Bank valuation ratio which will occur from our consultants. Contractors are international trading houses such as J.P. Morgan and Goldman Sachs and (from Greek side) the National Bank and the Piraeus Bank. By their cooperation, a price ratio will be fixed and so the tender book will be created. Seen through the most recent price ratio in Greece, revenues are expected to be from 13 to 19 times more than the profit and 2 or 3 times more than the book value. This means that the Organization’s value can be estimated at €1,5 billion at least.

How many shares will be distributed to public?

Approximately 20-30%. If market circumstances continue to be as favorable as they are now, it will be 30%. If they are not that good, this percentage has to be reduced.

The Greek Postal Savings Bank’s way to Sofokleous Street Stock Exchange is considered as a part of a reform “package” promoted by the Government. In which way do you think this procedure can play important role in determining the economic dynamics?

The decision taken by the Government and the Ministry of National Economy for the Greek Postal Savings Bank share listing is a remarkable sign of denationalization. Even if sometimes share listings function just steadily, so they cannot change the “nature of the animal”, in our case this does not occur. There are no questions on transparency. By entering the Stock Exchange we will get through many controls from international organizations as well, because we will be legally engaged in all the regulations of the Greek and the American Stock Exchange. This will dynamically affect the Organization’s entire way of operating.

I do believe that we will have a really positive result from this strategic decision of share listing. Domestic market is expected to be highly kinetic and this is a fact that will definitely affect the foreign institutional investors. I’m saying that because Greek Postal Savings Bank, on the contrary to other banks, has an excellent and clear portfolio. To be exact, out of approximately €10 billion we have only €2 million bad debts and €38 million predictions.

Even if from your sayings it is assumed that Greek Postal Savings Bank is a financially powerful Organization, on the other hand it is regarded as a relatively slow-moving, conservative mechanism which does not exploit all of the market’s opportunities. What do you think about that?

Well, in fact this used to be correct in the past. Let me give you an example: Up until 2002, Greek Postal Savings Bank was a public service containing all the negative connotations of a governmental Organization. This has changed now. In 2003, only €23 million were put up for home loans. In 2004 there were €150 million and in 2005 this amount is expected to reach €400 million. This evolution happened without advanced computerization that is taking part now and even without actual promotion that could make it known to broader public.

In 2006 we will be totally ready for that. So we do believe that the total amount for home loans will reach €800 million. We have provided €200 million for consumer loans with highly beneficial terms. We have approved consumer loans for public and private companies (after, of course, carefully valuating each company) offering a 5% interest rate instead of 9% which is provided by most other banks. The loan’s monthly instalment is deducted from the employee’s salary, so in this way we eliminate any risk and our customer has special benefit. We are also completing the installation of technologically advanced ATMs in all our branches, for decisively facilitating all kinds of transactions.

All our actions are carefully considered. The most important thing is that we are moving on. We have many things to do and of course we cannot make everything at once. But anyway, Greek Postal Savings Bank is going through its New Era and this is for certain.

So, it stands to reason that you have important competitive advantages in relation to other banks?

That is true. With the examples I gave you before, it is confirmed that Greek Postal Savings Bank is not a bureaucratic, slow-moving Organization anymore. People gradually start realizing that and – that’s the most important thing - they start responding. In the old days somebody had to wait for 120 days for a loan to be issued. Today this period is reduced to 32 days only and in some cases the loan can be issued in 15-20 days.

Which initiatives were held by the management to prepare this new era for the Greek Postal Savings Bank?

If you want to realize the difference, we have to make a comparison with the past. Greek Postal Savings Bank was a public Organization with 1250 employees, 57 of them were positioned as managers and 9 of these managers were assigned with “managerial” duties, but their salaries were typical low salaries of the public sector. This means that Greek Postal Savings Bank was an Organization which did not reward any initiatives and this had to change. So we had to apply some methods deriving from private sector. As we were a new management, we needed to invest some time for clearly understanding the Organization’s way of functioning, its dynamics, its people. That was really worthwhile and I do think that we managed to achieve some important modifications. In the beginning, we amended the regulations code. This procedure was completed after 10 months of constant negotiations with the trade union and I think that it was really a great achievement.

The trade union is a typical one of the public sector, very severe, with people coming from all political parties. We did not attempt to enforce some typical judicial methods for reaching it, instead we tried to understand their demands. We had to explain to our people that in order to have prospects in a highly competitive market, we had to find a common way for moving on. That is why we formed the New Regulations Code, which is similar to most private banks’ one. For example, there is radical change to salaries and to executives’ wages. A commission consisted of management and employees members altogether was established, for externally employing managers. The procedures are held as impartially as possible. In this way, while in older times chief manager was named the most long-standing graduate officer, now this position is assigned to the most efficient one. For me, this is the most radical change because there is chance for a long-term modification of the nature of the working relations.

I have to say though, we are one of the few governmental Organizations where the staff is standing by the management’s side, regardless of some occasional disagreements.

You have personally obtained a long-term course in banking business. As you are a technocrat coming from private sector, how do you appreciate the entire economical condition and perspective of the Greek Economy?

I do believe that in Greece we passed through a long period when the state was massively growing from all aspects. Its legal framework is highly unproductive, bureaucratic, restraining all initiatives, it does not reward success neither penalizes failure, then it is well disposed to legal and institutional flatness. From the 1960’s, when the state was keeping a 20% into the economy, we came at over 50%, suggesting a massive public sector which could lay down its conditions to private sector as well. That was essentially mischievous for everyone. This policy has started to change and recent actions can only be marked out for our common benefit.

Did you actually proceed to employments?

The Organization’s specifications and goals for improved service and development require additional staff. In this context, we are about to engage 600 new employees from the Supreme Council for Personnel Selection (ASEP), to cover our growing needs. Our company chart is planned for 1800 job vacancies, though we were having only 1250 employees. We are bound to engage temporary staff for three, four or five months, something really not appropriate for obtaining the qualified services we are aiming at.

Does the Greek Postal Savings Bank meet insurance problems for its employees, just like it happens to other banks and Public Organizations?

No, there is no such matter. All of the older employees are under the public insurance state, so to say they are public employees. Newer ones are registered to the Social Insurance Institute (IKA), so this is clear.

What is your major concern on Greek Economy’s progress and what would you like to be eliminated?

I hope that problems concerning insurance, bureaucracy and country planning will be solved. These issues are really essential for acquiring investments. If we do not acquire investments, the country will remain stable. I can see that, more than ever, there is a determined policy for solving these problems and moving on.

In a year-time from today, during the 71st Thessaloniki International Fair, in which state do you think Greek Postal Savings Bank will find itself?

I am certain that, within a year from now, people will be really aware of the Organization’s well-being. The results will prove this, so everyone will know that Greek Postal Savings Bank is continuously moving on. Our advertising campaign will be helpful in order to inform people on the Bank’s extended field of action and along with our people, we believe that this aging, old image will soon be forgotten.

Within next year our profits will be remarkably heightened, we will be in the Stock Exchange, in other words we will live in the new era of the Greek Postal Savings Bank.

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