Attica Bank reveals BCG-developed strategic plan

Greek bank Attica Bank has unveiled early details of its new strategy for the coming years. Developed in conjunction with Boston Consulting Group, the plan aims to boost the bank’s positioning and guide a return to profitability.

Founded in 1925, Attica Bank is one of Greece’s oldest financial institutions. With assets of over €3.5 billion, the Athens headquartered institution is currently the fifth largest Greek bank, specialising in retail and corporate banking services. Attica Bank also provides insurance and investment products.

Along with the broader Greek financial sector, Attica Bank continues to work to restructure and recover from a decade of financial challenges and austerity. As the bank embarks on the next stage of its transformation, Attica Bank has tasked Boston Consulting Group (BCG) with drawing up a forward-thinking strategy.

Following in-depth analysis of the bank’s strategy, structure and key objectives, the strategy consultants have concepted a trio of opening proposals to help the bank pick out its future path.

The first of three scenarios outlines a future for Attica Bank as a fully digital bank. This would require the transformation of the lender to a ‘digital platform bank’ – a complex process, but one which BCG suggests could prime Attica Bank to take advantage of a gap in the market.

The Greek financial sector has a gap in challenger banks, and while this move might take Attica Bank further from the operational standards of its competitors, it would also mean it was no longer bound by the limitations of a systemic bank.

Alternatively, BCG recommends a second proposal which could transform Attica Bank to specialise as a bank in the construction sector. Historically, Attica Bank was regarded as a ‘bank of engineers’, and today, the bank’s largest shareholder is still the Fund of Civil Engineers and Public Works Contractors (TMEDE), which holds over 46% of the bank's ordinary shares.

Given the construction sector’s strong growth prospects in the coming years – as Greece contends with the much-needed regeneration of its infrastructure – such a move is not only in keeping with Attica Bank’s DNA, but could yield an advantageous position in a booming sector.

Finally, a third scenario provided by BCG suggests the bank could shift to catering for small and medium-sized enterprises. Again filling a gap for ‘challenger’ companies, this time, the plan could help fill the market’s funding gap in a key sector of the domestic economy.

Industry data suggests Greek SMEs face a long-standing challenge to access financing products.  BCG has determined that Attica Bank could successfully tap this opportunity. This could be delivered by a bank the size of Attica – which would maintain a network of 50 branches throughout the country – if it were to concentrate on that specialist remit.

Difficult changes

Executing any of these plans is unlikely to be plain sailing, however. According to reports by Business Daily, the plans require large capital needs, ranging from €300 to 600 million.

At the same time, other industry sources are concerned about whether specialist banks can even be sustained in the Greek market. In the underdeveloped state the country’s financial sector is currently in, niche services tend to struggle – accounting for the ‘gaps’ that BCG identified.

One possibility is that Attica Bank instead hedges its bets, by combining all three strategies. This may make things even more complicated, though. The challenger bank strategy requires the shrinking of Attica’s branch network – even as the SME plan requires 50 branches to remain – so on top of having to find time and significant funds for the surplus of staff to leave with voluntary exit programmes, the bank would also have to weigh up the interests of the two programmes against each other.