Greek bank M&A likely when conditions right - EFG
ATHENS, June 7 | Tue Jun 7, 2011 5:12am EDT
ATHENS, June 7 (Reuters) - Consolidation in Greece's banking system through mergers or acquisitions can be expected when the time is right, the chief executive of EFG Eurobank (EFGr.AT), the country's second-largest lender, said.
"The trend towards strategic collaborations is a reasonable development, when conditions allow it," Nicholas Nanopoulos told a banking conference on Tuesday.
Greek authorities have called on the country's banks to explore alliances to form bigger entities to better cope with the debt crisis which has hit them on many fronts -- deposits, government bond holdings and interbank funding.
Greece plans to sell stakes in Hellenic Postbank (GPSr.AT) and ATEbank (AGBr.AT) as part of an asset disposal agenda that aims to raise 50 billion euros ($73 billion) by 2015 to cut public debt.
"It a right initiative to privatise these banks, but a bit premature for us to take a view. Whether we show interest or not needs to be left for some later stage," Nanopoulos said, responding to a question.
He said Greece's banking system had shown resilience and flexibility in coping with the impact of the debt crisis, with lenders cutting costs, shielding their balance sheets with provisions and deleveraging.
He said reducing banks' dependence on the European Central Bank (ECB) for liquidity must be gradual as abrupt adjustments could exacerbate the economic downturn.
ECB funding to Greek banks .FTATBNK fell slightly in April month-on-month, Greek central bank data showed on Monday. Lending dropped to 86.8 billion euros at the end of April from 87.9 billion in March.
"The basic problem of Greek banks is not capital but liquidity," Nanopoulos said.
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Corporate/Privatizzazioni/Fusioni.