Piraeus close to landing Geniki

Piraeus Bank and Societe Generale confirmed on Wednesday that they are in advanced talks for the transfer of Geniki Bank, a subsidiary of the French group, to the Greek lender that recently acquired the healthy part of ATEbank.

In separate Athens bourse filings the two banks said that no definitive decision has been reached yet, but sources agree that talks are very close to completion and are only awaiting the green light from the Bank of Greece and the Hellenic Financial Stability Fund (HFSF).

The transfer of loss-making Geniki Bank to Piraeus stems from Societe Generale?s decision to leave the Greek market. The French group is determined to minimize the losses it is incurring from its Greek subsidiary.

Geniki?s acquisition by Piraeus will probably be conducted in a way similar to that planned for fellow French-owned local lender Emporiki, with a prior recapitalization by the main shareholder so as to cover the bank?s capital needs without burdening the HFSF.

The plan provides for a minority stake for the French firm in the new company. Despite the fact that the level of the capital increase is estimated at 300 million euros, the required funds will likely be much higher in order to cover the funding gap created between loans and deposits as well as future losses which are expected to emerge from the deterioration of the economic climate.

Last year?s figures showed that Geniki?s loans amounted to 2.6 billion euros and deposits to 1.8 billion, losses reached 795.5 million euros and the group?s net position amounted to 161.7 million.

The sector?s restructuring will continue with state-owned Hellenic Postbank, as Finance Minister Yannis Stournaras told a parliamentary committee on Wednesday that it is ?non-viable.?

Hellenic Postbank SA?s workers union have called a 24-hour strike for today to protest the Finance Ministry?s decision to not provide an additional extension to the bank to report earnings for 2011. Stournaras stated yesterday that there have already been four extensions: ?There cannot possibly be a fifth one,? he stressed.