Piraeus Group is set to announce the details of a plan for the transformation of subsidiary Geniki Bank into a lender specializing in bad loan management and company restructuring by the end of September, sources have suggested.
At the same time Geniki, which Piraeus acquired last year from France’s Societe Generale, will develop investment banking activities, consultancy and private equity services etc, with a focus on small and medium-sized enterprises.
In that context, Geniki will proceed to a major share capital increase, with the entry of new investors and with Piraeus retaining only a minority stake. Sources say that the group intends to have a capital increase close to 500 million euros so that after the capital strengthening Geniki’s equity will be close to 1 billion euros. It currently amounts to some 350 million euros.
Piraeus group officials told Kathimerini that the objective is not to create a bank that will only clear out non-performing loans, but one that aims at revitalizing enterprises by radically restructuring them so that they can stand on their own two feet and survive in a competitive environment. Geniki will contribute toward finding new investors, financing investments and restructuring debts so that companies are able to operate competitively.
With that in mind, Piraeus group officials are in talks with experts abroad to create strategic cooperations for Geniki to secure access to know-how from similar efforts in other countries.
After all, the big challenge for the banking system now is to actively manage bad loans in a way that will not burden banks with more losses while ensuring that companies and households survive the crisis.