The initial public offering of Greece’s Postal Savings Bank (TT) will be priced between 10 and 13 euros a share, its chief executive said yesterday, raising about 550 million euros ($709.7 million) at the top end.

The divestment is part of the government’s 1.65-billion-euro privatization agenda for 2006 to pay down public debt, one of the highest in the eurozone as a percentage of gross domestic product (GDP). TT CEO Panayiotis Tsoupidis said the offering will run from May 24 to 26 and involve existing shares. “The goal of listing TT is to strengthen its competitiveness in the banking system. One of our main aims is to achieve high growth rates in retail banking activities,” he said.

Greece will sell up to 30 percent of TT through the IPO and privately place another 1.24 percent of the savings bank’s shares with staff.

A greenshoe option — allowing for the sale of more shares to the public if demand is high — for an additional 3.6 percent is also part of the plan.

TT’s expected IPO proceeds and the 328 million euros Greece raised from the sale of 7.2 percent of ATEbank last week total more than 50 percent of the government’s 2006 privatization revenues goal.

The 15th lender to join the Athens bourse’s banking index, TT has a network of 136 branches, 130 ATMs and 1,224 workers, and ranks seventh among Greek banks by deposits. It owns 10 percent of the Greek Postal Service (ELTA), with access to its 820 post offices.

Tsoupidis said the 104-year-old savings bank, which historically lent money to civil servants for home purchases, had a 9.6 percent market share in deposits and 5 percent in mortgages. At the end of 2005 deposits were 9.9 billion euros.

TT started shifting toward consumer lending in 2003, launching a credit card with a competitive 9 percent interest rate, and wants to take on bigger commercial banks in the higher-margin consumer credit business.

“We have lower costs as our network is old and established whereas other banks are investing to grow theirs, incurring costs,” Tsoupidis said.

TT posted a 7 percent drop in net profit to 122.5 million euros last year. Net interest income rose 0.25 percent to 242 million euros.

Based on the initial price range for the IPO, TT will go public at 11.5 to 14.9 times its 2005 net earnings. Greek banks trade at an average 17 times 2006 earnings, according to Reuters Estimates. (Reuters)