The domestic banking sector has entered a new cycle of restructuring with the aim of maintaining its profitability at the multi-year highs of the last two years. Shareholder changes, new acquisitions, collaborations and mergers make up the puzzle of the milestones of 2024, amid a climate of euphoria in the markets and an enhanced willingness by the international investment community to take on Greek risk.
The beginning takes place next Wednesday with the announcement of Piraeus Bank’s results for the year 2023, which according to information will satisfy analysts. The bank exceeded its target for credit expansion last year, while it will show a delinquency ratio below 3.5%. On the same day, it will be presented by its CEO Christos Megalou the business plan for the next three years, which will foresee positive growth rates of its loan portfolios until 2026.
Denationalization
In this way, the trigger will be given to start the process of selling up to 27% of the shares held by the state through the Financial Stability Fund (TFS). At the moment, the decision has not been taken by the government on the percentage that will be allocated. In any case, however, it cannot be lower than 20%, in order to ensure a volume for the transaction capable of attracting institutional portfolios.
Market sources emphasize that the demand for domestic assets and the interest shown by foreign funds especially for Piraeus Bank, as seen in the recent presentations of Greek listed companies abroad, allow the disposal of the entire state participation on very good terms. The goal of all parties involved is for the transaction to be completed by the first ten days of March at the latest.
The series of the national team
There will apparently be share turnovers within the year at the National Bank as well. After the successful placement of the HFSF for 22% of its shares at the end of 2023, the participation of the State has been reduced to 18% and it remains to be seen when the plan for its sale will be activated. It is recalled that the HFSF has committed after the last public offer not to proceed with another transaction until May. This means that from the summer, the final withdrawal of the state from the systemic group will be possible.
There is a scenario that part of the securities held by the HFSF will be repurchased by the National Bank, as a measure to reward its shareholders, and the rest will be made available to the markets through a competitive process. At this stage, however, the CEO of the group Pavlos Mylonas is focused on the development of operations in financing, under the new corporate identity of the bank, which will be presented to the press next Wednesday.
Eurobank’s plans
On the other hand, the fully privatized Eurobank, under its CEO Phocian Caribbean, accelerates the implementation of the plan to enhance its profitability, through the expansion of its balance sheet outside of Greece. The catalyst is the absorption of Hellenic Bank of Cyprus, in which it currently controls 29.2%, while it has agreed with other shareholders to acquire an additional 26.1%. Ten days ago, the Cyprus Competition Protection Commission gave the green light for the relevant transactions and now all that remains is the approvals from the Central Bank of Cyprus, the ECB and the Insurance Commissioner of Cyprus.
After receiving them, a public proposal will follow from Eurobank for the acquisition of all Hellenic shares. Sources from the bank estimate that in this way it will increase its percentage up to 65% and then proceed to absorb the Cypriot credit institution.
The integration of Hellenic Bank into the Eurobank group will create an important source of profitability. In 2023, the net after-tax result of the Cypriot credit institution is estimated to have reached 400 million euros. This is a significant increase in the size of the systemic group, which will double the profits from the foreign subsidiaries. At the same time, Eurobank is attempting to expand its operations in the Gulf countries and the wider region of Southwest Asia, opening representative offices in India, Israel, Egypt and the United Arab Emirates with the aim of attracting wealthy clients to provide wealth management services.
Synergies in Alpha
The management of the also private Alpha Bank is proceeding with the implementation of its strategy to strengthen operations in the areas of asset management and bancassurance products, following its recent agreement with UniCredit. It is recalled that the Italian group acquired 9% of the shares held by the HFSF, while the subsidiaries of the two banks in the Romanian market were merged, creating the third largest player in the local sector.
In Greece, Alpha Bank will retain a 49% stake in Alpha Life, while the remaining 51% will be transferred to UniCredit. Goal of the CEO of the Greek group Vassilis Psaltis is the increase in sales of insurance and bancassurance programs through the exclusive long-term agreement for their availability in the Alpha Bank network.
At the same time, there will be cooperation between the two sides in the field of mutual funds and Asset Management products to provide UniCredit investment solutions to the 3.5 million clients of the Greek group. Finally, the cross-border cooperation opportunities of the two banks will be utilized for the development of their operations.
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