NBG free to apply its strategy, says minister

Economy and Finance Minister Giorgos Alogoskoufis yesterday appeared to distance himself from National Bank’s bid to acquire Turkish bank Finansbank. Alogoskoufis, back from Paris where he attended the session of the Organization for Economic Cooperation and Development (OECD), presided over by Prime Minister Costas Karamanlis, said that business decisions are entirely the managers’ responsibility. «The government will not become an investment consultant,» Alogoskoufis told reporters, adding that talks with NBG management focused only on the political climate between Greece and Turkey and the risk this might entail. Some pension funds, especially the NBG employees’ main and auxiliary funds, have vehemently opposed the deal, after initially approving it. In the nearly two months since the deal has been announced, NBG shares have fallen about 20 percent and, with a capital increase coming to help pay for the acquisition, employees have voiced fears that the once state-controlled bank may pass into foreign management. Pension funds hold a total of 23 percent of NBG, with its employees’ fund holding a little over 5 percent. A dilution in ownership would mean it would slip below 5 percent and lose many of a main shareholder’s prerogatives. Foreign funds hold 38.4 percent. The NBG employees’ fund obtained a one-week delay, to June 1, of the shareholders’ meeting that will approve the capital increase. Asked about the pension funds’ position, Alogoskoufis said their position should be to maximize their members’ benefits and to comply with the law that pension funds must use only up to 23 percent of their reserves to invest in shares. He said he intended to raise this ceiling. «Funds must have a balanced portfolio and the government and politicians must not be concerned with whether they buy this or that bank’s shares,» he said. Before he left for Paris earlier this week, Alogoskoufis had indicated that he would not give the go-ahead for funds to borrow in order to take part in NBG’s capital increase. Alogoskoufis said that NBG’s shareholders’ assembly is the sovereign body. «It is the one that monitors (management’s moves) and everything is decided there,» he said. He attacked the opposition PASOK party for criticizing the deal, after also initially endorsing it. «The opposition should have learned from its mistakes in the case of the stock market (bubble) when it encouraged pension funds to invest their reserves in equities,» he said, adding that the present criticism was pure political speculation. «Opposition officials cannot know more than (NBG) managers,» he said.