Greece picks Eurobank to buy Postbank ahead of mid-July deadline

Sat Jul 13, 2013 7:33pm EDT
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By George Georgiopoulos

ATHENS (Reuters) - Greece's bank rescue fund picked Eurobank EFGr.AT 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 Saturday.

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-capitalized banks to fund the economy out of its six-year slump.

The Hellenic Financial Stability Fund (HFSF), the rescue vehicle set up to recapitalize 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 privatizations agenda, Athens has shown better performance on the banking front. Authorities have met deadlines to stress test and recapitalize 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 projected proceeds.

Greece's unsuccessful attempt to sell state gas company DEPA was the latest setback in its privatizations program that underpins its 240 billion euro EU/IMF bailout.

Goldman Sachs (GS.N: Quote) was the fund's adviser on the Postbank sale. Alpha Bank (ACBr.AT: Quote), National Bank (NBGr.AT: Quote) and Piraeus Bank's (BOPr.AT: Quote) Geniki unit had also bid to acquire TT.   Continued...

A man leaves an ATM of a Hellenic Post bank branch in Athens July 12, 2013. REUTERS/Yorgos Karahalis