ECONOMY

Gov’t to float 25 percent of Postal Savings Bank; won’t seek alliance

Greece’s new government plans to float shares of state-owned Postal Savings Bank, scrapping previous plans to sell a stake to another bank, a senior Finance Ministry official said yesterday. Last year the Socialist government said it would offer at least 35 percent of the bank in a tender early this year and float a further unspecified stake later on. But it put the preparations for the sale on ice ahead of the March 7 general elections, and the new conservative Cabinet wants to take a different road. «We don’t want to sell Post Bank, only to list it on the bourse,» the official told Reuters. He gave no timetable for a possible flotation of some 25 percent of the bank’s shares. Greece’s top banks had been seen as the leading contenders for Postal Savings, whose large national network and a 9-billion-euro pool of deposits was seen as a good match for them. Analysts estimate its value at some 1.4 billion to 1.7 billion euros ($1.7-$2.1 billion). The sale would have redrawn the country’s banking landscape and was seen as a potential catalyst for mergers among domestic banking heavyweights. Six banking and financial groups – National Bank, Emporiki (formerly Commercial) Bank, Agricultural Bank, Alpha Bank, EFG Eurobank and Piraeus Bank – dominate the domestic market, accounting for more than 90 percent of assets. National, Emporiki and Agricultural Bank are controlled by the State. The country’s top banks remain small compared with their European peers, however, and the Greek central bank said in a report last year there was room for consolidation. Foreign partners preferred But the Finance Ministry official said the new government wanted to encourage the leading banks to forge foreign alliances rather than to join forces at home, fearing that too much concentration could thwart competition. «Our purpose is not to have mergers between the major Greek banks; our intention is to promote collaboration and strategic alliances between Greek and foreign banks,» he said. Emporiki has been in talks with France’s Credit Agricole about doubling its stake, and Dutch group ING owns about 5 percent of Piraeus Bank. Among smaller Greek banks, General Bank is now majority-owned by Societe Generale after a deal clinched early this year. The Finance Ministry official said the government would continue to support Emporiki’s efforts and also back the country’s biggest lender, National Bank, if it chose to seek a foreign partner. «Our support includes National Bank if it wants in the future to have a strategic investor,» the official said, without specifying if it would allow a foreign bank to gain majority control over Greece’s flagship banking institution. National, in which the State holds directly and indirectly around 29 percent, was in merger talks with Alpha Bank, but the deal collapsed two years ago, and both banks have since pursued independent strategies.