French banking group Societe Generale, which controls local lender Geniki Bank, is examining ways of disengaging itself from its investment in Greece.
According to a Reuters report on Thursday, the group?s chief financial officer, Bertrand Badre, suggested that Societe Generale has cut its funding line to its Greek subsidiary close to zero and is studying possible exit strategies.
The management of both Societe Generale and French rival Credit Agricole, owner of Greece?s Emporiki Bank, have come under fire at home for buying into the Greek credit sector. There is widespread worry regarding the consequences of a possible ?Greek accident? for the parent groups.
Last week the management at Emporiki confirmed it was in talks with other Greek lenders with a view to a strategic cooperation. ?The talks are taking place within the framework of working for the stabilization and restructuring of the Greek credit sector,? the Emporiki statement read.
Indeed, Credit Agricole has invested heavily in Emporiki and is pushing for the best possible price, while the latter is determined to stay in a market that over the years it helped to shape to a significant extent.
Industry sources note that Emporiki desires to be part of the sector?s current and future developments and will likely ?continue to play a pivotal role in it,? as one source put it, citing the lender?s role as one of the oldest and most dynamic financial institutions in Greece.
Reuters also cited JPMorgan analysts, who wrote in a note that with the cut to funding lines, SocGen?s remaining exposure to Geniki was 300 million euros of capital and subordinated debt. ?The group could also be looking to sell Geniki, which should be easier given the smaller size of Geniki vs Emporiki,? they argued.