NEWS

State to sell its stake in banks

Persistent rumors of mergers and acquisitions have abounded in the Greek banking sector since the government recently declared its intention to speed up privatizations. The privatization aim is twofold: first, to provide enough revenue to enable the government to lower the public debt by almost five percentage points, as promised to the European Commission and, second, to keep the Athens Stock Exchange on the upward course it has been following during the past four months. Scenarios currently circulating involve the two largest banks still under state control, National and Emporiki. In both cases, the State retains only a minority share but is still the controlling shareholder. Options range from total state withdrawal to partial sale. In the case of National Bank, the State retains about 20 percent. The State can either choose to sell its stake through a public offering or forge a marriage with another bank. In the first case, it expects to get about 900 million euros from the sale. Officials at the Economy and Finance Ministry, however, think that this would risk an excessive dispersal of shares, resulting in no overall control. One option they are considering is floating just half of the State’s share. The latter, even with a 10 percent stake, would still be the dominant shareholder. A more aggressive move would be to rekindle the failed merger with Alpha Bank, the largest privately owned Greek bank. This would have the additional benefit of creating a strong group, well capable of competing in international markets. In the case of Emporiki, much will depend on France’s Credit Agricole accepting to buy the state’s 10 percent stake. If this happens, the French, with 20 percent, would take over control of Emporiki.