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Greek lender Attica Bank does not favour becoming part of a big state-controlled banking pillar and wants to stay independent and grow through buyouts, its chairman said on Tuesday.
The government and the central bank have prompted Greek lenders to rethink strategy and form stronger groups to cope with the debt crisis, fanning speculation that mergers and acquisitions will reshape the banking landscape.
"I prefer an autonomous course for Attica Bank, to see it disentangle from the pincers of the state. We can have new shareholders come in — healthy pension funds with strong liquidity," board Chairman Yannis Gamvrilis told Reuters in an interview.
Piraeus Bank set the ball rolling in July, sparking a rally in bank stocks, with an offer to buy government stakes in Hellenic Postbank and ATEbank for 701 mln euros in cash.
With the government and its advisers — Deutsche Bank, HSBC, Lazard — yet to take a stance on the offer, ATEbank has counter proposed a quadruple merger to form a strong state player in the country's banking system instead of teaming up with Piraeus.
This would involve merging with Attica Bank, Hellenic Postbank (TT) and the Loans and Consignments Fund (L&C). The two state-controlled banks hold 22 and 19% in Attica, whose major shareholder is the TSMEDE engineers fund, with 43%.
"Healthy pension funds like TSMEDE and ETAA can buy stakes currently held by TT and the Loans and Consignments Fund. At a later stage, Attica's shareholders can increase the free-float but maintain control of 51%, letting the share play in the big league, where it should," Gamvrilis said.
Gamvrilis, 59, a civil engineer, became chairman of Attica in March. He also heads the engineers fund and is vice-chairman of ETAA, which comprises the pension funds of lawyers, notaries, judges, health care practicioners and TSMEDE.
He said these pension funds have liquid assets exceeding 6.0 bln euros.
Greek lenders face a tough economic environment as austerity policies to slash deficits have deepened the recession, leading to a rise in non-performing loans. With access to wholesale funding markets closed on sovereign debt worries, banks have been forced to turn to the ECB for their funding needs.
EYE FOR BUYOUTS
Attica Bank, with total assets of 5.0 bln euros, has a current market value of a little over a quarter of a billion euros. Rated Ba2 by Moody's, it ended the first half with a net loss of 3.6 million euros.
The lender, with a high Tier 1 capital adequacy ratio of 17.1%, has a small exposure to Greek government bonds — less than 5% of its assets. The bank has taken provisions for just over half of non-performing loans which reached 8.6% of the loan book at end-June.
"Attica Bank can grow organically and also through acquisitions of small banks. There are more than three small lenders that could be possible targets," Gamvrilis said without going into details.
Smaller players in Greek banking include Proton Bank, Millennium-Greece, a unit of Portugal's Millennium bcp, Geniki, a subsidiary of Societe Generale, Probank, T-bank and FBB Bank.
"They also realise they will not be able to continue solo once a wave of consolidation takes off. We are talking about banks with a retail focus, which would be complementary to Attica, where 75% of the loans are to small and mid-sized businesses," Gamvrilis said.
He said growth for Attica could come organically or via buyouts. Its network can expand to about 140 branches from 80 currently, raising its market share in loans and deposits above 3% from 2% currently.
Gamvrilis said the board has retained a foreign investment bank he would not name to conduct a thorough strategy review and come up with proposals on Attica's future, expected to be completed by end October.
