SocGen has no plans to sell Geniki Bank

Geniki Bank’s administration has denied reports that Societe Generale plans to sell the bank, with CEO Patrick Couste stressing that the French group’s expansion in Greece was a strategic move for SocGen. Couste also told Kathimerini of the parent group’s determination to restructure and further develop the Greek bank, underlining the major increase in share capital currently under way. Holding a 52.33 percent stake in Geniki, SocGen would cover all of its rights in the increase, while the French group has expressed willingness to cover any rights not taken up. According to officials from the French group, Societe Generale’s expansion to Greece was a strategic choice and selling subsidiary banks or moving out of countries is not part of the group’s philosophy. Indicatively, they cited only two cases in which SocGen has ever exited from investments in foreign countries, specifically in Argentina, where it sold a subsidiary bank, and in Nigeria, with the termination of certain activities there, in both cases being compelled by extraneous factors. To further bolster Geniki Bank, the parent group decided to go ahead with a share capital increase of -210 million, with procedures expected to have been concluded by Monday. The increase was deemed to be imperative in order to restore the bank’s capital base, as its six-month capital adequacy index dropped to 4.75 percent, way below the 8.0 percent limit imposed by the Bank of Greece. Geniki officials estimate that the credit institution could be back on a profitable track in 2008, saying that certain operations which had caused a major increase in expenses have since been remedied through network renewal, portfolio streamlining and restructuring of internal processes, and would allow the bank to henceforth operate on a new footing. In addition, Geniki is planning to market a series of new products in the field of bancassurance, as well as in consumer credit. In recent weeks, the bank’s stock has been drawing investor interest, with a major increase in the volume of transactions. The upward trend was fed primarily by speculation about possible changes in Geniki’s ownership. Though stock market officials regard it as a natural development in view of the fact that the bank’s share price had fallen to historic lows.

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