Banks in the spotlight

Despite its being midsummer, the banking sector is showing activity once again, with attention focused on what will happen with the Postal Savings Bank, the Bank of Attica and the General Bank. Yesterday, National Economy and Finance Minister Nikos Christodoulakis met with representatives of the engineers’ fund (TSMEDE) and the Bank of Attica in an effort to achieve the merger of the bank with the Postal Savings Bank. TSMEDE owns 34 percent of the Bank of Attica, and the Postal Savings Bank owns 17 percent of the same bank. Sources said that Christodoulakis is in favor of TSMEDE (perhaps with other funds joining in) buying a 40 percent stake in the Postal Savings Bank, so as to achieve the merger of the Bank of Attica with the Postal Savings Bank. In this case, the new organization will be listed on the stock exchange automatically and will create capital gains capable of providing significant revenues for the State. Also, Prime Minister Costas Simitis is to meet today with Christodoulakis, Defense Minister Yiannos Papantoniou and Bank of Greece governor Nikos Garganas to discuss the possibility of finding a buyer for the General Bank, which is burdened by bad debts and is applying a program to return to health. The meeting is considered vital because the General Bank is part of a government initiative to promote structural changes through its sale. Although the program is going satisfactorily, the bank’s further development (indicated by a 30 percent increase in revenues from interest and 20 percent from services in the last semester) demands a share capital increase of at least 50 million euros to fund its expansion. With the failure of a previous effort to sell the bank, and with low interest now, the government may be looking for a solution that would introduce change to the bank sector but also provide revenues. Speculation that the Postal Savings Bank might buy out the General Bank offers a potential resolution to the latter’s problem of capital needs, but this would deprive the State of money from the sale. Today’s meeting will also deal with Christodoulakis’s wish to take over supervision of the General Bank, which is controlled by the army providence fund, which is, in turn, controlled by the Defense Ministry.

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