Greece’s bank rescue fund picked Eurobank 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 eurozone and IMF backers to sell Postbank and Proton Bank by today as a condition for the release of more funds from the 240 billion euro (US$314 billion) 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.
Photo: EPA
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 today, 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 privatization program that underpins its 240 billion euro EU/IMF bailout.
HFSF was effectively selling Postbank to itself as it owns not only 100 percent of the bank but also 93.6 percent of Eurobank, Greece’s fourth-largest lender, after recapitalizing it with 5.84 billion euros last month.
On Friday, the HFSF also picked Eurobank to acquire the small lender Proton, which is also fully owned by the fund.
A Eurobank executive who declined to be named said that the bank’s offer involved shares, not cash.
Authorities wound down Postbank in January after efforts to sell it failed. They stripped out bad loans from its portfolio and transferred less risky assets and deposits to a new entity called New Hellenic Postbank. The bad loans are being sold.
The HFSF pumped 4 billion euros into the bank to cover its funding gap — the difference between assets and liabilities — and a further 500 million euros to recapitalize it.
Like other Greek lenders, Postbank was hit by writedowns on Greek bonds and loan impairments in the wake of a debt crisis and deep recession.
The healthy relaunched bank has assets of 13.7 billion euros, deposits of 10.7 billion euros and a network of about 200 branches.
Proton is a much smaller bank, which has deposits of 1 billion euros and 1.3 billion euros in assets.
BUSINESS UPDATE: The iPhone assembler said operations outlook is expected to show quarter-on-quarter and year-on-year growth for the second quarter Hon Hai Precision Industry Co (鴻海精密) yesterday reported strong growth in sales last month, potentially raising expectations for iPhone sales while artificial intelligence (AI)-related business booms. The company, which assembles the majority of Apple Inc’s smartphones, reported a 19.03 percent rise in monthly sales to NT$510.9 billion (US$15.78 billion), from NT$429.22 billion in the same period last year. On a monthly basis, sales rose 14.16 percent, it said. The company in a statement said that last month’s revenue was a record-breaking April performance. Hon Hai, known also as Foxconn Technology Group (富士康科技集團), assembles most iPhones, but the company is diversifying its business to
Apple Inc has been developing a homegrown chip to run artificial intelligence (AI) tools in data centers, although it is unclear if the semiconductor would ever be deployed, the Wall Street Journal reported on Monday. The effort would build on Apple’s previous efforts to make in-house chips, which run in its iPhones, Macs and other devices, according to the Journal, which cited unidentified people familiar with the matter. The server project is code-named ACDC (Apple Chips in Data Center) within the company, aiming to utilize Apple’s expertise in chip design for the company’s server infrastructure, the newspaper said. While this initiative has been
GlobalWafers Co (環球晶圓), the world’s No. 3 silicon wafer supplier, yesterday said that revenue would rise moderately in the second half of this year, driven primarily by robust demand for advanced wafers used in high-bandwidth memory (HBM) chips, a key component of artificial intelligence (AI) technology. “The first quarter is the lowest point of this cycle. The second half will be better than the first for the whole semiconductor industry and for GlobalWafers,” chairwoman Doris Hsu (徐秀蘭) said during an online investors’ conference. “HBM would definitely be the key growth driver in the second half,” Hsu said. “That is our big hope
The consumer price index (CPI) last month eased to 1.95 percent, below the central bank’s 2 percent target, as food and entertainment cost increases decelerated, helped by stable egg prices, the Directorate-General of Budget, Accounting and Statistics (DGBAS) said yesterday. The slowdown bucked predictions by policymakers and academics that inflationary pressures would build up following double-digit electricity rate hikes on April 1. “The latest CPI data came after the cost of eating out and rent grew moderately amid mixed international raw material prices,” DGBAS official Tsao Chih-hung (曹志弘) told a news conference in Taipei. The central bank in March raised interest rates by