TT IPO expected to do well despite a jittery market

Subscriptions to the Postal Savings Bank’s (TT) initial public offering began yesterday, with brokers expecting the sale to do well despite the stock market’s sharp retreat. «I expect TT’s offering to be fully covered, despite the weak sentiment on the stock market,» said a broker who did not want to be named. The government is offering 31.24 percent of the 104-year-old savings bank, expecting to raise up to 591 million euros. «With a loan-to-deposit ratio of just 30 percent, much lower than other Greek banks, TT has great potential to grow its loan portfolio,» said another broker. The government is selling existing TT shares and privately placing 1.24 percent with the savings bank’s staff. After the IPO, its holding will fall to 55.16 from 90 percent, if a green-shoe option for an additional 3.6 percent is exercised. The IPO price range has been set at 11.30 to 13.50 euros a share, which translates to an earnings multiple of 15.3 to 18.2 based on last year’s profit. In terms of price-to-book value, TT is offered at 1.85 to 2.2 times. Greek currently trade at 15.4 times 2006 earnings, dented by the stock market’s recent sell-off. (Reuters)