NBG to sell Finansbank stake when time is right

The National Bank of Greece, the country’s largest lender, expects non-performing loans to peak this year and will sell a 20% stake in its Turkish unit Finansbank as soon as market conditions allow, its CEO said.
Finansbank helped NBG grow first-quarter earnings by 39% despite a deep economic slump at home, and the sale of a minority stake will further boost the group's capital adequacy, with its Core Tier 1 ratio seen topping 13%.
Hit by the country's debt crisis, Greek banks face challenges on many fronts, including shrinking deposits, closed interbank funding, rising loan writedowns and losses on government bond holdings.
"We are planning the disposal of a 20% stake as soon as market conditions allow," NBG's Chief Executive Apostolos Tamvakakis told the bank's annual shareholders meeting.
He said NBG was in no rush to proceed with the divestment as its capital base remains strong with Core Tier 1 capital currently at 12%.
Apart from Finansbank, management is also mulling other moves that could strengthen capital ratios by another 120-150 basis points, he said.
One such option may be to group NBG's operations in southeast Europe under one umbrella, aiming at greater flexibility, synergies and autonomous access to capital markets, Tamvakakis said.
NBG is also present in Bulgaria, Romania, Serbia and Cyprus.
Tamvakakis also told shareholders that non-performing loans, which hit 8.5% of NBG's book in 2010, are expected to peak this year, but the bank had the profits to absorb them.
"NBG's pre-provision earnings cover group provisions by 1.5 times, meaning we can absorb a 50% increase in provisions without a need to tap capital reserves," Tamvakakis said.
Looking at deposits, he said National Bank was faring better than the sector, with its base down 2.1% in the first four months of the year versus a 3.8% drop in the system.
A shrinking deposit base has added to the strains of Greek banks, which have become reliant on ECB funding for their liquidity needs as access to wholesale funding remains shut on sovereign debt concerns.
Tamvakakis said NBG had 13.2 bln euros in government bonds and 1.6 bln euros of T-bills in its portfolio.