The Greek state, close to completing the exit from the shareholding of the big banks

English Section / 12 martie

The Greek state, close to completing the exit from the shareholding of the big banks

Versiunea în limba română

The Financial Stability Fund of Greece (HFSF) has only one step left to complete the sale of its holdings in the main banks in the country, after the successful sale of all shares held in Piraeus Bank, announces.

Thus, the cycle of the recapitalization of the Greek banking system will be officially closed and, by extension, that of the Greek economy, which has shown its resistance, despite the new challenges, marking a growth rate four times higher than the euro zone average, according to the source quotes.

As of September 2023, HFSF sold shares in Eurobank, Piraeus Bank and Alpha Bank, while maintaining a stake of around 18% in National Bank of Greece and around 70% in Attica Bank. The fund held stakes in the country's top four commercial banks, after injecting around 50 billion euros to recapitalize them during the financial crisis.

After the government completed the divestment of the share in Piraeus Bank, the HFSF, the Bank of Greece and financial analysts appreciated that the sale was a vote of confidence given by the international investment community, not only for the Greek banking system, but also for the Greek economy.

At the time of the sale of the 27% stake held by the state in Piraeus Bank, the Finance Minister from Athens, Kostis Hatzidakis, declared that the Greek banking system had closed a chapter, stating: "Since the crisis and the recapitalization procedure, we have reached at a time when major investors have shown their confidence in all the banks of systemic importance in Greece". The Greek official pointed out that the investors' interest was eight times higher than the offer. Kostis Hatzidakis also added that the sale price of the shares was set at higher levels than the closing quotation from the stock exchange on the Friday before the start of the trial, "which is extremely rare worldwide, since in such cases of distribution in the mass of the shares the prices are almost always set with a discount in favor of the buyers". The minister added: "The most recent developments reward the strategy of the HFSF management, which effectively prepared and organized the process, and underlines the correctness of the choices made by the government, not only regarding the way and time in which the sale of state shares took place, but also, more generally, for the banking system itself. And, after all, it represents a national success to be taken into account".

Double benefit for the state

The successful cycle of HFSF exit from systemic banks started with Eurobank, followed by Alpha, National Bank of Greece and Piraeus. According to the data that Hatzidakis presented to the Parliament in February, the Greek state has not only an accounting profit from operations, but, above all, a general benefit from sales. The data show that for the rescue of the four systemic banks, the Greek state - through the HFSF - paid a total of 30.9 billion euros, while the benefit it had is as follows: 28.2 billion euros from bonds clipping type (PSI program) owned by the four systemic banks; 3.8 billion euros from the redemption of convertible bonds; 2.8 billion euros from the sale of holdings carried out to date, without the program having been completed.

The overall total is 34.8 billion euros, that is, the benefit of the state in relation to the 30.9 billion euros it gave for recapitalization is 3.9 billion euros, without taking into account the dividends from 2013- 2023, in the amount of 5.5 billion euros paid by the Bank of Greece to the state, mainly due to the provision of extraordinary liquidity support to the banking system through emergency assistance, noted the cited source.

In the speech held in front of the Parliament on February 19, Hatzidakis emphasized that the results of the sales of holdings in Eurobank, Alpha and National Bank prove the correctness of the government's choices.

Hatzidakis' position is echoed by many experts, including finance professor Dimitris Kenourgios from the University of Athens, who told Kathimerini that the developments "signal a new era for the Greek banking system". His Highness specified: "It seems that we have overcome, with evidence, a period of crisis in which almost half of the credit portfolios were not serviced and the banks could not play the role of credit provider in the Greek economy".

By bailing out systemic banks, Greek citizens' deposits were also saved, which were about ten times the cost of the recapitalization, and companies and households were protected from collapse, according to government officials.

Kenourgios is of the opinion that the purpose of the state's investment has been fulfilled: "The state's revenues will not exceed 5 billion euros, but the flip side of the coin is that through recapitalization the banks have helped the Greek economy, households and companies in the country, and non-performing loans have been reduced. Therefore, there was an indirect effect of the recapitalizations for the Greek economy," Professor Kenourgios concluded.

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