Greece picks Eurobank to buy Hellenic Postbank

ATHENS - Reuters

A man makes a transaction at an ATM of a branch of Hellenic Postbank, which Greece has picked Eurobank to buy as a part of the bailout plan. REUTERS photo

Greece’s bank rescue fund picked Eurobank to buy New Hellenic Postbank as part of consolidation in the sector and to meet a condition for the next tranche of Greece’s bailout, it said after a board meeting on July 13.

Athens agreed with its euro zone and International Monetary Fund backers to sell Postbank (TT) and Proton Bank by July 15 as a condition for the release of more funds from the 240 billion-euro rescue package keeping Greece afloat.

The sale is the latest move in a consolidation of the battered banking sector that aims to form stronger, well-capitalised banks to fund the economy out of its six-year slump.

The Hellenic Financial Stability Fund (HFSF), the rescue vehicle set up to recapitalise Greece’s major lenders, said it aimed to sign a binding agreement with Eurobank on Monday, without providing further details.

In contrast to its slow-moving privatisations agenda, Athens has shown better performance on the banking front. Authorities have met deadlines to stress test and recapitalise the major banks and wind down lenders deemed not viable.

By contrast, targets for state asset sales to pay down public debt have been missed, leading authorities to mark down projected proceeds.

Greece’s unsuccessful attempt to sell state gas company DEPA was the latest setback in its privatisations programme that underpins its 240 billion euro EU/IMF bailout.

Goldman Sachs was the fund’s adviser on the Postbank sale. Alpha Bank, National Bank and Piraeus Bank’s Geniki unit had also bid to acquire TT.

HFSF was effectively selling TT to itself as it owns not only 100 percent of TT but also 93.6 percent of Eurobank, Greece’s fourth-largest lender, after recapitalising it with 5.84 billion euros last month.

On July 12, the HFSF also picked Eurobank to acquire the small lender Proton, which is also fully owned by the fund.

A Eurobank executive who declined to be named told the bank’s offer involved shares.