ECONOMY

EFG Eurobank inspects Postal Savings Bank

The Postal Savings Bank (PSB) has in recent weeks been the subject of due diligence by EFG Eurobank to find out whether the organization retains the qualities of an attractive proposal for the Latsis Group bank to purchase. Eurobank, highly interested in the deal, studied the savings institution’s structure and operations, but focused especially on its future outlook. The results showed that PSB continues to draw investor interest for the signing of a strategic alliance, provided though that this takes place within a visible time frame and that all interested parties, whether Greek or foreign, are allowed to take part in procedures. Eurobank’s study showed that PSB’s extended customer base is still regarded as its biggest asset, while its treasury is estimated to contain up to -11 billion. However, the organization’s working capital, competitors believe, is not being put to full use, a view not shared however by the PSB administration. Competitors also believe that the government should act to begin procedures for a strategic deal as soon as possible, even before the end of 2008, if feasible. But this, under the existing circumstances, does not seem possible, primarily owing to what is believed to be an unsuitable investment environment. Another important issue regards the fact that, according to signs interpreted by Eurobank officials, procedures for the privatization of PSB would not be open to domestic interested parties. What is more likely to occur is what eventually happened with two previous cases of privatization of state-owned credit institutions, i.e. Emporiki Bank and Geniki Bank. In both cases, the government barred domestic businesses or groups from taking part in the bid, even though many had expressed such an interest. Both banks were eventually sold to foreign, specifically French, banking groups. Eurobank officials say that because both banks are still facing serious trouble, with their French managements seeming unable to restore their profitability, the government this time should not use the same method. It should also allow Greek parties to participate in the PSB bid.