Surveys

The objective of this survey was to assess the initial impact of the global financial crisis on the Greek banking system up until the end of 2008. It focused on the activities and performance of Greek financial institutions not only in Greece but also their expansion into “New Europe”. The main analysis resulted in a comparative evaluation framework for the performance of all Greek banks which also demonstrates the major strengths and weaknesses of each one.

Another aspect that was included was the credit crunch that led to a global recession, and had a considerable impact on the sector. It became evident that Greek financial institutions, due to limited exposure to toxic investment banking products, were mostly affected by the negative consequences of the recession and in some cases faced liquidity issues.

This past year did not leave banks unaffected by any stretch of the imagination, since there was a shift to lower-risk products, cost optimisation and more conservative growth. However, the main impact of the crisis on Greek banks will be assessed in the 2009 and 2010 editions of this survey, which are likely to show a greater impact of the serious issues facing the Greek economy on bank operations, resulting in a severe test of the durability of each institution.

Competitiveness can be defined on two dimensions: at macroeconomic (national) and at microeconomic (company) level.

Country Competitiveness

The OECD defines a country's competitiveness as "the degree to which a country can, under free and fair market conditions, produce goods and services which meet the test of international markets, while simultaneously maintaining and expanding the real incomes of its people over the long term".

According to World Economic Forum’s (WEF) Global Competitiveness Index, although Greece is classified as an innovation-driven economy, it is in 71st position out of around 130 countries, down from 41st place in 2005. It finds itself alongside Colombia and Egypt, just ahead of Croatia, Bulgaria and FYROM and within EU27, Greece is in second-last position.

Company Competitiveness

Over the last seven years, Kantor Management Consultants has conducted a systematic competitiveness assessment of Greek companies. A company is competitive when it is able to produce higher-quality and lower-cost goods than its local and international competitors at a profit, and to sustain this advantage in the long term - thus achieving continuous growth. Additionally, the potential of a Greek company in the current economic conditions is not only dependent upon its competitiveness, but also its resilience to the downturn and hence its levels of liquidity and leverage.

The competitiveness and resilience of a company is examined by comparing its five-year profitability and growth ratios, as well as resilience metrics with appropriate sectoral benchmarks. More specifically, the performance of over 6,000 Greek companies was assessed and then compared to their US counterparts with data spanning the period 2004–2008.

According to the results of Kantor’s survey, just above 400 (~7%) companies were both competitive and better performing than the average US company, and this percentage is declining. An additional 900 companies (~15%) were assessed as potentially competitive, since they performed better in some areas than the average US company and hence show high potential for further improvement. At the same time, approximately 600 Greek companies were assessed as strong and well placed to overcome the crisis and grow further, with ~60% of these falling within the competitive and potentially competitive categories.

IT and data, media production/services, clothing and furniture manufacturers, and business and management consulting were identified as being amongst the most competitive sectors, as it is in these areas that the majority of competitive companies operate.

In the current climate, all companies need to review their strategies to fit the new market realities and survive and improve or sustain their competitiveness.