So long Bank of Athens, hello Grobank
Greece’s debt crisis hastened Bank of Athens’s reinvention as a lender across the food business chain
In a shift from pita to ploughs, Bank of Athens this week rebranded itself Grobank.
This is the latest shake-up in SA’s banking sector, which has seen Discovery launch a behavioural lender, the big four traditional banks rejigging their branch networks, and low-fee options Zero and Tyme rubbing their hands at the prospect of taking a slice of the retail pie.
"We are launching what is effectively a 70-year-old ‘new’ bank," says Spiro Georgopoulos, Grobank’s CEO.
Originally established to cater to the needs of SA’s Greek community, the institution now has agricultural services company Afgri as its largest shareholder and will pivot towards being a lender for those in farming and food production.
And the bank, which has assets of R2.4bn, is not aiming for the mass market.
"It is a highly competitive space and probably overbanked," says Georgopoulos.
Grobank has a carefully carved-out niche that it wants to grow.
The focus will be on "chunky, family-run businesses", says Georgopoulos.
The institution will fundamentally still be a business bank and the lessons learnt over decades serving small and medium-sized enterprises, such as family-owned restaurants, will come in handy as it vies for clients across the food business chain.
Bank of Athens, founded in 1947, has been thinking of transforming itself for nearly a decade. But with the National Bank of Greece as its controlling shareholder, the debt crisis and economic meltdown in the Hellenic Republic disrupted the initial plans.
"As we started transforming the bank in 2010, the crisis in Greece hit," Georgopoulos says.
Though the bank’s owners were officially in the Greek capital, the shots would soon be called from Frankfurt, home of the European Central Bank (ECB), and Luxembourg, seat of the European Stability Mechanism (ESM).
Between the ECB and ESM the funds were raised to tide Greece and its financial institutions over, but with certain strings attached.
One of the conditions was that the National Bank of Greece let go of non-core assets, such as Bank of Athens.
Afgri, which has an existing financial services business in the agricultural sector, in 2017 saw a big opportunity in acquiring the business and getting a banking licence to boot.