Advisers picked for bank strategy

Greece’s government yesterday chose three international banks to help carve out a strategy for the state’s holdings in two lenders in a decision likely to play a decisive role in shaping the country’s banking landscape. Lazard, Deutsche Bank and HSBC Holdings were picked to «explore and assess the Greek state’s strategic options,» the Finance Ministry said in a statement yesterday. «The government will take every step to secure the stability of the Greek financial system and promote its strategic restructuring,» the statement said. The advisers will value the state’s bank holdings and examine alternatives, it added. The advisers are likely to advise Finance Minister Giorgos Papaconstantinou on whether he should accept a proposal last month by Piraeus Bank, the country’s fourth-biggest lender, to buy government stakes in ATEbank and Hellenic Postbank. Piraeus offered 701 million euros for the holdings to boost deposits and reduce its reliance on funding from the European Central Bank. ATEbank, 77 percent-owned by the state, was one of seven European Union banks to fail the region’s stress tests last month and will require a capital injection. Papaconstantinou and Bank of Greece Governor Giorgos Provopoulos have called for Greek banks to merge as loan losses rise and asset quality worsens in the debt-burdened country. Last month, the Bank of Greece called on lenders to seek strategic alliances that will make them big enough to survive the economic crisis. In a financial stability report, the Bank of Greece said lenders should initiate strategic deals as the deepening recession cuts into their profits, reducing credit volumes and upping bad loans, while also creating liquidity problems. «Restructuring in the banking system would help Greek banks to acquire a critical mass that would allow them to benefit from economies of scale and more quickly regain access to international money and capital markets,» the report said.