Fortnight of "fire" for the banks and the disinvestment of the State

The time is counting down for the two large-scale disinvestment moves of the State from the banks that are currently underway, moves that mark the full return of domestic banks to European normality.

Next Friday, the process to seek competitive bids for the HFSF's package in Alpha Bank concludes, following UniCredit's spectacular proposal, with most predicting a happy ending with the acceptance of the Italian proposal.

There are rumours in the market about the submission of a second wedge proposal, however, it is not so simple to acquire a large stake (9%) of a systemic bank, and there are no serious chances that a challenger with an investment profile similar to the Italian bank will emerge. It should be noted that the evaluation of the bids submitted will be based not only on the price but also on the quality of the investor. It is obvious that a bid, even at a better price, from a hedge fund is unlikely to outperform the proposal of a major European bank such as UniCredit and it is no coincidence that the proposal was received with extremely positive comments by both the government and the Bank of Greece and the supervisor, i.e. the European Central Bank.

However, sources close to the HFSF consider an improvement in the price offered by UniCredit -1.33 euros per share - while the stock market has reacted extremely positively to the announcement of the strategic alliance, driving Alpha Bank's share above the level of 1.4 euros.

In any case, next Friday, at 17.30, the tender procedure for the submission of bids for the Alpha package will be completed and immediately afterwards, probably at a Board of the HFSF to be held on Sunday, the final decisions will be taken.

The baton to the National Bank

With the completion of the process for the Alpha package, the baton will immediately pass to the National Bank of Greece with the HFSF proceeding with a placement for 20% to 25% of the bank's shares from the roughly 40% it holds.

This will be preceded tomorrow, Tuesday 7 November, by the publication of NBG's financial performance for the third quarter, which is seen as a key element in the process due to the bank's excellent performance. According to analysts, the current interest rate environment is extremely favourable to National Bank, due to the structure of the bank's balance sheet, and is driving its profitability and efficiency to impressive levels.

Investors are reportedly very interested in the shares of National Bank of Greece, which is the reason why the expansion of the percentage to be allocated to 25% from the 20% initially envisaged is being considered. Sources closely following the process tell BD that the interest is so great that even the entire stake of the HFSF, i.e. 40% of the bank's shares, could be absorbed.

The bid book for the allocation of 15% to 20% to foreign investors is likely to open on Wednesday 13 November, while a process for the allocation of an additional 5% to domestic investors through the Athens Stock Exchange will run in parallel.

Eurobank's results tomorrow

The bank's strong momentum will be reflected in Eurobank's results to be announced tomorrow, November 7. Eurobank was the first to proceed with the restructuring of its loan portfolio and the first to be released from the HFSF by buying 1.4% of its shares held in the HFSF portfolio. Eurobank's major strengths include its diversified revenue base as, in addition to its banking operations in Greece, the bank has a large portfolio of commercial real estate assets that it operates and maintains a strong presence abroad (Cyprus, Bulgaria, Luxembourg), with international operations contributing about 1/3 of its total revenues.  

It should be noted that last week Alpha Bank and Piraeus Bank announced third quarter results, showing a performance that exceeded analysts' expectations.