Government sells bank stake, raises 500 mln euros

The government yesterday reduced its holding in Postal Savings Bank (TT) after placing 20 percent of the shares with funds as part of its privatization program. The placement, priced at 18.10 euros a share, fetched half a billion euros and cut the government’s stake in the country’s sixth-largest bank by market capitalization to 45 percent. Analysts said the sale completes a major part of Greece’s state divestments agenda for 2007 which targets proceeds of 1.7 billion euros to pay down public debt, one of the highest in the eurozone as a percentage of GDP. «TT becomes a private bank with a large number of shareholders. It can contribute to a more competitive banking system,» Finance Minister Giorgos Alogoskoufis said in a statement. Greece is scrambling to reduce its debt load to 100.1 percent of GDP this year from 104.1 in 2006. Last month it sold shares in telecoms group OTE after it gave up on a search for a strategic partner for the major telecom. «The state raised about 500 million euros and together with 1.1 billion raised from the placement of OTE shares late last month the government has covered the biggest chunk of the sought proceeds from privatizations in 2007,» said an analyst who did not want to be named. Postal Savings has a current market value of 2.53 billion euros. Postal Savings Bank Chief Executive Panos Tsoupidis told Reuters the placement was oversubscribed. «TT will now become more flexible in decision making and more competitive,» he said. Greece took the savings bank public last year, selling 35 percent through an initial public offering. The bank operates only in Greece with a network of about 138 branches. «The catalyst for the share’s course in the future is a full privatization or the entry of a strategic investor,» said analyst Sofia Skourti at HSBC Securities. «The government has not said anything on this front.» TT shares trade at 16.8 times 2007 estimated earnings, at a premium to the Greek sector’s average 14.7 multiple, according to Reuters Estimates. (Reuters)

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