Attica Bank plans to increase its share capital by 150-200 million euros, according to reports on Thursday. However, a proposal by the bank’s management for the appointment of a strategic investor has caused friction within the government.
The friction indicates that the chapter regarding Attica’s role in the country’s banking system and its ability to influence state decisions has not been closed.
This potential influence on state decisions is reflected in the fact that the bank’s main shareholder is the Single Social Security Entity (EFKA), which owns 50.626 percent of its shares.
Disagreements over the appointment of a strategic investor for Attica Bank were clear at a recent government committee meeting, where the proposal was opposed by Energy Minister Giorgos Stathakis while reportedly being backed by Deputy Minister to the Prime Minister Dimitris Liakos. Finance Minister Euclid Tsakalotos reportedly sat on the fence.
A middle ground was struck with the decision to move ahead with the share capital increase and to seek a strategic investor without compromising the Single Social Security Entity’s interests.
Whether this is feasible or not, and how exactly it can be done, will be determined by Rothschild, the consultants selected by the bank.
However, according to bank sources, questions are already being asked about EFKA’s future role, as it is unknown whether it is willing to participate in the bank’s share capital increase and, if so, with what amount.
Moreover, if it increases its stake in the bank’s share capital, it may find itself at odds with European Union competition policy, prompting an intervention by the EU’s Directorate-General for Competition.
Moreover, other bank sources note that in order to save the bank, there is no other way than through the entry of a strategic investor.
According to reports, a decision about the bank’s share capital increase will be taken at a government level in November, with the aim of completing the share capital increase by June 2018.
The share capital increase is expected to cover the 100.2 million euros of state aid granted to it in 2008 in return for preferred stock.