Battle over Postal Bank stake

Once Parliament passes legislation concerning the transformation of the Postal Savings Bank to a societe anonyme company, procedures for its merger with Bank of Attica and its listing on the Athens Stock Exchange are expected to take off. Sources said the finance and transport ministries have agreed on the merger. Nevertheless, a series of issues need to be resolved first before this can take place. One of these is the 15-percent stake in the Bank of Attica held by the Loans and Deposits Fund. Both TSMEDE, the engineers’ fund which owns 34 percent of Bank of Attica, and the Postal Savings Bank, which recently acquired a 17-percent stake, are interested in expanding their share as a bigger holding would boost their position prior to the two banks’ merger and would allow them a bigger share of the combined bank. The transformation of the Postal Savings Bank to a societe anonyme company is expected to reduce its book value to 880 million euros from the current 1.32 billion euros as it would have to transfer its stakes in National Bank and Commercial Bank to the State. The acquisition price for the two shares are valued at approximately 440 million euros. Excluding the Loans and Deposits Fund’s stake in the Bank of Attica which must be disposed off, TSMEDE’s stake in the combined bank is estimated at around 10-11 percent. The holding is considered quite high when compared with the size and value of the merged bank. In the event that the Postal Savings Bank acquires an additional 15-percent stake in the Bank of Attica, its holding could rise to 32 percent, at the same time substantially reducing TSMEDE’s share. At the present moment, TSMEDE is negotiating from a position of strength, thus allowing it to demand a merger on its own terms. Sources said the engineers’ fund is planning to ask for something in exchange for allowing the merger to go ahead, such as a bigger role and greater management involvement. However, one of the things troubling TSMEDE appears to be a merged bank that will remain a state entity. Sources said the fund has discussed this with the finance and transport ministers and has been assured that this will not be the case. «Don’t go to the Greek teams because the presidents won’t honor the contracts. You’ll lose your money,» is the advice given by players speaking from bitter experience of the situation in Greece.

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