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Western EuropeApril 4 2004

Alpha Bank goes for gold

The chairman of Alpha Bank says its outlay of E78m to become the official banking sponsor for the Athens Olympics was money very well spent.
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Alpha Bank – Greece’s largest private bank – outbid National Bank of Greece three years ago to win the sponsorship deal for the 2004 Olympics. As bankers to the Athens Olympic Committee (Athoc), the Games’ organising body, Alpha expects to handle Olympic-related transactions of more than E5bn. It is also providing payroll services for Athoc’s staff of 1600 people and banking services for about 1500 domestic suppliers.

In addition, Alpha has exclusive rights to provide banking services at more than 100 Olympic venues in the city, including installation of ATMs and operation of credit card terminals. The bank also handles ticket sales to Games events through its network.

Race to the finish

The banking sponsorship was one of eight grand national sponsorships offered by Athoc, which raised a total of E200m out of a Games budget totalling E1.9bn. Alpha’s outlay was the highest, followed by OTE, the Greek public operator, which put up E59m to become the telecommunications sponsor for the Games. Yannis Spanudakis, Athoc’s managing director, says: “Our aim was to limit the number of sponsorships to prevent the Games from becoming too commercialised. But revenues haven’t suffered.”

The deal has revitalised Alpha’s image and boosted brand recognition both domestically and in the regional market – the Balkans and Cyprus, says Yannis Costopoulos, Alpha’s chairman.

“As Athoc’s bankers, we’ve had access to new customers with whom we can build a relationship,” he says. “It’s a good fit with our strategy for expanding consumer lending and loans to small and medium-sized enterprises.”

Mr Costopoulos declines to say how much Alpha expects to make from the Olympic sponsorship. But Athens-based analysts estimate Alpha could recover up to 50% of its outlay by 2006.

Smell of victory

Alpha has developed a successful portfolio of Olympic-related products that have outperformed projections. Last year, sales of credit and debit cards increased by 20.5%.

The first was an Olympic gold credit card, issued in partnership with Visa – one of a dozen international sponsors of the Olympics. Twenty percent of the card’s E400 subscription fee is allocated to Athoc, which also receives 0.5% of the value of every purchase made with the card.

Alpha has issued more than 100,000 Olympic gold cards against a target of just 30,000 – in part because when the cards were first issued, they carried a single-digit interest rate, the lowest in the market at the time.

Sweet rewards

The second credit card product is the silver Epathlon card – named after the ancient Greek word for a prize in a sporting event. The card, issued in partnership with OTE and its mobile subsidiary, COSMOTE, offers subscribers a reward equivalent to 0.75% of the value of purchases, which can be used for buying services and goods from the three Olympic sponsors.

Alpha has sold 110,000 Epathlon cards and will continue to issue them after the Games. The target is to reach 500,000 cards in the next four years and double the bank’s credit card exposure to around E600m.

Last year’s launch of a new Greek credit data bank that is, for the first time, compiling historic data on consumer borrowers and credit card-holders is helping to consolidate risk, Mr Costopoulos says.

A youth banking scheme has taken off thanks in part to Alpha’s Olympic promotion effort, which brings Greek athletes and coaches to provincial towns to demonstrate and discuss their sports and also provides a selling opportunity for Alpha’s local branches. About 25,000 young Greeks have opened accounts under the scheme, which also includes a reward programme.

Mr Costopoulos says: “The Olympic Panorama promotion is a key element in our sponsorship programme. It has attracted more than two million peopleto events held all over Greece and has been a huge success.”

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