Government to cut Postal Bank’s equity capital by 50 percent

The government will not back down from its decision to sell a significant stake in Postal Savings Bank, despite strong opposition from employees. It will, however, reduce its equity capital in half, to make its sale easier and to add revenues to the budget. The government’s move was announced to employees by Economy and Finance Minister Nikos Christodoulakis in a meeting yesterday afternoon. Christodoulakis specified that the government will sell a stake of 35 to 40 percent in the bank through an international, open tender which will be called immediately. Later, another 15-20 percent of the bank will be floated on the Athens Stock Exchange and 2 percent will be offered to pension funds and bank employees. The valuation of the bank will begin immediately in order for the State to proceed with the equity capital reduction, either through cash or bonds. The sum to be absorbed by the State is estimated at 500 million euros. This, as Christodoulakis admitted yesterday, will help resolve problems with the current budget. Christodoulakis told employee representatives that the government will try to preserve Postal Savings Bank’s character as a vehicle providing housing loans to people with modest incomes. He failed to convince employees, however, and they will continue their strike. On Monday and Wednesday, however, Postal Savings Bank branches will be open to serve depositors and pensioners. Tuesday is a holiday. Employees want the Postal Savings Bank to remain a state-controlled bank, ostensibly to better serve their clients but mostly to preserve their own status as civil service employees with assured lifetime employment. Yesterday, they marched to the Economy Ministry holding banners against the bank’s being taken over by commercial banks and urging customers to withdraw their savings if this were to happen. On the other hand, banks want to acquire a controlling stake in Postal Savings Bank. One of the candidates to buy it, Emporiki Bank, has specifically said it would only be interested to buy a controlling stake. The sale of the bank has reportedly divided the government, with Transport and Communications Minister Christos Verelis, who, until recently, exercised control over the bank, expressing reservations. Opposition parties, right and left, have also opposed the sale. Yesterday, Left Coalition MP Yiannis Dragasakis said that, under existing laws, selling the bank would be illegal.