Attica Bank is heading toward nationalization, as its losses of 306 million euros activate the participation of the state in the lender’s share capital.
The nationalization solution is emerging as an intermediary step in the streamlining plan, via a new €1.3 billion securitization that will form part of the second version of the Hercules 2 state asset protection scheme. The aim is to drastically cut Attica’s ratio of bad loans from 41% at end-2020 to just 1%.
The state’s participation – estimated at around 25% – will come via the issue of warrants by the lender that the state will acquire so as to conceded them later to the existing shareholders of the bank or private investors.
Given that the Single Social Security Entity (EFKA) already controls 32.34% of Attica, it is likely it won’t obtain the warrants it is entitled to due to the opposition of the country’s creditors, so they will be conceded to private investors as part of the scheduled capital boost the bank’s management has planned for this fall. That would also dilute the stake of other stakeholders that don’t exercise their acquisition rights, such as the engineers’ social security fund (TSMEDE), which controls a 46.32% stake.