BoG: Separate recap for National, Eurobank

National Bank of Greece and Eurobank Ergasias will stage their recapitalization separately, Bank of Greece announced late on Sunday, thereby freezing their merger procedure. All signs point to the two banks continuing autonomously.

The process and the timetable of the share capital increases of the two lenders as well as those of Alpha Bank and Piraeus will proceed as planned, BoG said.

It added that all four systemic banks will have to be recapitalized before the end of April.

It followed a Sunday evening meeting between the creditors’ representativers in Athens and Finance Minister Yannis Stournaras at his ministry. They will hold a new meeting on Monday.

The creditors have been eager to avoid the creation of such big a group that would not be esy to find a strategic investor in the future.

Instead they have opted for the maintenance of a fourth pillar in the country’s credit sector, with Eurobank already said to be the favorite to absorb state-owned Hellenic Postbank.

All four banks have already prepared for general meetings that will set in motion their share capital increases, the BoG noted in its statement, reminding that the increases will be covered by the Hellenic Financial Stability Fund (HFSF).

“The stability of the Greek banking system is fully secured, just as all deposits are fully secured according to the principles of the Greek bailout program,” the BoG statement concluded.

Later on Sunday the boards of both National and Eurobank sent letters to the BoG admitting they are unable to cover by private means the 10-percent threshold needed in their share capital increases for them to retain their private status, which means that the HFSF is fully undertaking their recapitalization.

National has acquired 84 percent of Eurobank’s shares, but after the recapitalization by the HFSF its stake will shrink to just 3 percent.

A future tie-up between National and Eurobank is not ruled out, Kathimerini understands, but this will be up to the HFSF to consider at a later date.