Eurobank moves on TT

EFG Eurobank, Greece’s second-largest lender, increased its holding in Hellenic Postbank (TT), the former Postal Savings Bank, yesterday to more than 5 percent in a deal that has fueled speculation of takeover activity in the sector. Talk of merger activity has grown recently after drops in the market valuations of Greek lenders – due to the credit crunch and global market turmoil – have created cheaper banks that are more attractive takeover targets. Eurobank, which upped its stake in TT by 3.9 percent to 5.7 percent, announced the purchase is part of its regular investment choices rather than the first step to acquire the lender. «EFG Eurobank has invested in Postal Savings Bank as part of its investment portfolio after evaluating this participation on investment criteria,» it said. The bank did not disclose the price at which it bought the stock in a transaction completed yesterday. Shares in state-controlled TT shot up 10.29 percent to 11.58 euros in response to the news, while Eurobank, valued at just over 10 billion euros, advanced 1.28 percent to 19.06 euros. Senior Economy Ministry sources said the state is not in favor of TT merging with another Greek lender. The government last year sold a 20 percent stake in TT, raising about half a billion euros and cutting its holding in the lender to 45 percent. Stocks in Piraeus Bank, another lender reportedly involved in takeover activity, jumped 6.01 percent to 19.40 euros. Word of Piraeus Bank hooking up with Greece’s largest lender, National, surfaced last week. The two banks officially dismissed the rumors but market participants remain unconvinced that a deal is not on the cards. In a sign that National is gearing up to go shopping, it made a decision earlier this week to increase its share capital through a 1.5-billion-euro rights issue. Bank sources said National, which is present in 12 countries, is raising the funds to improve its presence in fast-growing markets abroad. In 2006, National raised 3 billion euros to buy out Turkish Finansbank, the first Greek bank to expand into Turkey. Strong credit growth along with low interest rates have helped power banks’ profit growth in recent years but rising lending costs and a slowing economy are likely to weigh on bottom-line earnings this year. The latest acquisition in the sector involves Alpha Bank, Greece’s third-largest lender, buying a majority stake in newly established OJSC Astra Bank in Ukraine as part of plans to expand in the region.

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