New interest in General, but TT sale still in limbo

Two-year-old First Business Bank (FBB) has the necessary capital to contest a majority stake in a future tender for General Bank, subject to shareholder approval, FBB’s Managing Director Efstathios Papageorgiou said. General Bank and the Army Pension Fund, controlled by the Defense Ministry and which holds a 38.5 percent stake, have said they are searching for a strategic investor, in an effort to meet the urgent need to boost the bank’s capital base. With a current market value of 161.6 million euros, General Bank is estimated to require at least 50 million euros to fund its expansion initially and overcome a sizable problem of bad debts. An attempt in July 2002 to sell a 15 percent stake failed due to adverse market conditions. The government has said it is awaiting the recommendations of a foreign firm of consultants. Papageorgiou said FBB would be interested only in a majority stake and the management in General. FBB aims to expand its branch network to 12 by the end of next year and 25 on a medium- to long-term basis. It also hopes to expand into the market of small and medium-size businesses and investment services, and boost commission income from consultative services in risk management and restructuring of balance sheets. Separately, Hellenic Technodomiki, Greece’s largest construction group, denied a press report that it was interested in buying a stake in General Bank. «We have never been interested in General Bank. There is no issue,» Reuters quoted Nicholas Thihas, group chairman, as saying. Separately, the Engineers’ Pension Fund (TSMEDE) said yesterday it is not ready to submit a bid for a 34 percent stake in state-controlled Postal Savings Bank (TT). «The certain thing it is not possible to submit a bid tomorrow,» TSMEDE’s president, Tassos Koublis, said in view of a scheduled meeting today with Economy Minister Nikos Christodoulakis, citing still-unresolved issues. He said TSMEDE would ask for an extension of the deadline, but ministry sources did not rule out the issuing of an international tender for TT in which the five biggest Greek banks would also participate. TT is coveted for its large mortgage and savings portfolio and extensive network of branches. TSMEDE was said to be prepared to offer about 350 million euros for the stake. According to TSMEDE sources, TT is valued at 1-1.5 billion euros, depending on the method of valuation.