By George Georgiopoulos
ATHENS, July 13 Greece's bank rescue fund picked
Eurobank to buy New Hellenic Postbank as part of
consolidation in the sector and to meet a condition for the next
tranche of Greece's bailout, it said after a board meeting on
Athens agreed with its euro zone and International Monetary
Fund backers to sell Postbank (TT) and Proton Bank by July 15 as
a condition for the release of more funds from the 240
billion-euro rescue package keeping Greece afloat.
The sale is the latest move in a consolidation of the
battered banking sector that aims to form stronger,
well-capitalised banks to fund the economy out of its six-year
The Hellenic Financial Stability Fund (HFSF), the rescue
vehicle set up to recapitalise Greece's major lenders, said it
aimed to sign a binding agreement with Eurobank on Monday,
without providing further details.
In contrast to its slow-moving privatisations agenda, Athens
has shown better performance on the banking front. Authorities
have met deadlines to stress test and recapitalise the major
banks and wind down lenders deemed not viable.
By contrast, targets for state asset sales to pay down
public debt have been missed, leading authorities to mark down
Greece's unsuccessful attempt to sell state gas company DEPA
was the latest setback in its privatisations programme that
underpins its 240 billion euro EU/IMF bailout.
Goldman Sachs was the fund's adviser on the Postbank
sale. Alpha Bank, National Bank and Piraeus
Bank's Geniki unit had also bid to acquire TT.
HFSF was effectively selling TT to itself as it owns not
only 100 percent of TT but also 93.6 percent of Eurobank,
Greece's fourth-largest lender, after recapitalising it with
5.84 billion euros last month.
On Friday, the HFSF also picked Eurobank to acquire the
small lender Proton, which is also fully owned by the fund.
A Eurobank executive who declined to be named told Reuters
the bank's offer involved shares, not cash.
Authorities wound down TT in January after efforts to sell
it failed. They stripped out bad loans from its portfolio and
transferred less risky assets and deposits to a new entity
called New Hellenic Postbank. The bad loans are being
The HFSF pumped 4 billion euros into the bank to cover its
funding gap - the difference between assets and liabilities -
and a further 500 million to recapitalise it.
Like other Greek lenders, TT was hit by writedowns on Greek
bonds and loan impairments in the wake of a debt crisis and deep
The healthy relaunched TT has assets of 13.7 billion euros,
deposits of 10.7 billion and a network of about 200 branches.
Proton is a much smaller bank with deposits of 1 billion euros
and 1.3 billion in assets.
The acquisition of TT improves Eurobank's liquidity profile
and its reprivatisation prospects, adding to doubts on whether a
suspended merger with its peer, National Bank (NBG), will go
"As far as the troika is concerned, the merger is dead. The
tie-up of TT with Eurobank is the optimum combination. It adds
to the value of Eurobank in the HFSF's portfolio in view of its
reprivatisation," the Eurobank executive said.
In April Greece's international creditors blocked the plan
to merge Eurobank with NBG on fears that it would become too
big. Last month, Eurobank's new CEO said the bank must follow an