Piraeus Bank Bulgaria and ING Bulgaria have signed a retail banking quadrilateral agreement.

Details of the agreement, signed on December 8, were unveiled at a joint news conference at Sofia's Hilton Hotel on December 20. The agreement involves Piraeus Bank Bulgaria, ING Bank in Bulgaria, ING Pension Fund and ING Life Insurance.

Piraeus Bank, which currently has 67 branches in Bulgaria and aims to increase this to 100, will sell ING products. ING Bulgaria will refer its retail customers to Piraeus Bank branches. ING's existing retail customer base will be transferred to Piraeus Bank after approval of the strategic partnership is given by the Competition Protection Commission (CPC). Application for approval of the move will be made to the CPC in early January 2007.

Plans are for the retail banking transfer to be completed in March/April 2007, and for product sales to start in April 2007.

The agreement in Bulgaria is similar to one concluded between the two banks in Greece in 2002.

Igno van Waesberghe, chief executive of ING corporate banking in Central and Eastern Europe, said that the group had more than 60 million customers in more than 50 countries. Rating AA+ by Standard and Poor's, ING has about 120 000 employees worldwide and was one of the first financial institutions to move into Central and Eastern Europe. In terms of market capitalisation, ING currently ranks 12th in the world. It is number one in Central and Eastern Europe in combined life insurance and pension fund services. In Bulgaria, ING is number four pension provider with an eight per cent market share.

Jan Willem Overwater, country manager of ING Bulgaria, said that ING would be responsible for production and services for insurance products. Piraeus will be responsible for production and services for retail banking products. ING Sofia branch will "migrate" its retail banking portfolio to Piraeus.

He said that the main beneficiaries of the move would the banks' clients, because there would be a much wider network of service locations, and the partnership would make available a wider range of products. The benefit to ING Sofia branch, which started as a wholesale institution, would be that it would continue its core activity and would be able to further its product development. A further benefit was that the Sofia branch would be working together with retail banking specialists. "For our pension and life insurance products, a new distribution chain will be created," he said.

There would be synergy in product development for specific clients, Overwater said.

Piraeus Bank Bulgaria chief executive Athanasios Koutsopoulos said that the banking group was among the most dynamically developing organisations in Greece and South Eastern Europe. The Piraeus Bank group offered a wide range of financial products and services, and had good know-how in retail corporate investment banking, leasing and shipping finance. The group had a branch network of close to 500, managed about 29 billion euro in assets, had a loan portfolio of about 20 billion euro, and was rated BBB+ by Standard and Poor's, Koutsopoulos said.

The past year had been particularly good for Piraeus, he said, as evidenced by its Q3 2006 profits.

In Bulgaria, the bank had been one of the most dynamically developing. It offered a wide range of products in retail and wholesale banking, including for SMEs. The bank had been active in Bulgaria since 1994, and after its merger with Evrobank in 2005, was now one of the top 10 banks in Bulgaria, Koutsopoulos said. In the lending sector, it was among the top six in Bulgaria.

Koutsopoulos said that the bank was in sixth place in the mortgage loans market in Bulgaria, and its share of this market had grown by 311 per cent between December 2005 and September 2006, to reach five per cent.

"This not where we will stop," Koutsopoulos said. Among other moves, the bank was developing new offers of consumer loans that would be launched in early 2007.

Through its subsidiaries, Piraeus Leasing and Piraeus Auto Leasing, Piraeus Bank Bulgaria offered a wide range of leasing products and services for individual and corporate clients, he said.

The bank aimed to be among the top five in Bulgaria.

"We see the partnership with ING as a particularly important development for the future of both institutions in Bulgaria. This is only the beginning," Koutsopoulos said.

Asked about the financial parameters of the deal, Overwater said that this was a "private arrangement and will stay private".