The Best of GRReporter
flag_bg flag_gr flag_gb

The fate of Protonbank is still unclear

26 July 2013 / 00:07:00  GRReporter
2077 reads

Protonbank’s fate is still unclear, as it has to find a new strategic investor by the end of the week. The Bank of Greece has recently been in talks with private investment funds to support the bank and become strategic investors in the financial institution. The amount required for the recovery of the bank is 222 million euro.

The online edition of To Vima refers to sources from the financial sector according to which the investment funds have requested additional state guarantees for the repayment of some questionable loans left by the previous administration. Currently, the bank is under the control of the state Financial Stability Fund which has undertaken to complete the transaction. The guarantees have not been included as conditions in the preliminary negotiations and now Protonbank is likely to remain without a strategic investor.

If the Financial Stability Fund does not receive new offers from prospective investors by 26 July it will have to divide Protonbank into a "good" and a "bad" part. Then, it will launch in the market only the "good" part of the bank which consists of the total deposits of the institution.

In this case, the Greek analysts expect that the local banks which have crossed the 10-percent threshold of free-capital raising, namely the National Bank of Greece (NBG), Alpha Bank and Piraeus Bank, will be interested in what has been left of Protonbank. It is expected that the NBG will declare the greatest interest as it has failed to complete the merger with Eurobank. The takeover of Protonbank will offset some of the losses the NBG has incurred due to the deal that failed several months ago.

Under the original plan for the rescue of Protonbank, 30-35 million euro of the 222 million euro required for its recapitalization should have come from its major shareholders (Fafalios, Liras and Sarpetas). The remaining amount would have come from foreign investment funds which have demanded additional guarantees in order to participate in the deal.

Meanwhile, the Bank of Greece has announced that the financing of the private sector continued to shrink in June. The month ended with a negative result of -4.1% compared with -3.7% in May. The net flow of total lending to the domestic private sector fell by 212 million euro just in thirty days.

The data of the central bank show that the financing of private enterprises in June amounted to 63 million. For the same period in 2012 this amount was 1.07 billion euro. The most significant decline in financing is reported in the groups of self-employed, sole traders and farmers. Their financing in June 2013 amounted to 12 million euro which is significantly lower in comparison with the value in 2012, when the net flow of lending was 49 million euro.

Tags: EconomyCompaniesProtonbankRecapitalizationFinancial crisisGreece
GRReporter’s content is brought to you for free 7 days a week by a team of highly professional journalists, translators, photographers, operators, software developers, designers. If you like and follow our work, consider whether you could support us financially with an amount at your choice.
You can support us only once as well.
blog comments powered by Disqus