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As expected, on Friday afternoon the Financial Stability Fund decided that 100% of Proton Bank will be sold to Eurobank. In addition to the Greek bank, the American fund Monarch Alternative had also submitted an offer, but the proposal was not good enough. Today, the Financial Stability Fund’s General Assembly will hold a meeting at which it will decide on TT’s sale, probably again to Eurobank. This will create a fourth bank pole that will be wholly or partly privatised in the autumn.

The Troika’s involvement in TT’s sale decision is also noted. It is believed that TT will be passed into the hands of Eurobank precisely because of its interference. Reports that the Troika wants to keep Eurobank as the fourth "good" pole have been circulating for a long time. The reason for this is simple. Without the additional value that it would gain with an acquisition Eurobank would have not been able to attract private capital, in this way enabling the Financial Stability Fund to sell it. With the addition of TT, the Group will acquire a different value, since many disadvantages of Eurobank, which could not enter the market on its own, will be "corrected".

The four poles

For months, the Troika has made it clear to Greek authorities that it wanted four good banking groups to remain in the Greek banking system. However, this implies the preservation of Eurobank’s autonomy. If the bank had failed to acquire TT, it would have had a problem with its survival and authorities would have been forced to sell it in pieces to other major banking groups. The Troika did not want any risks. A few months ago, it terminated the transaction with the National Bank at a much greater risk. Now, it has supported Eurobank in order to keep it alive.

It is noted that according to the last-minute change of the conditions of the tender for TT’s sale, proposals that include cash will not be taken into account. Thus, the bids of the National Bank, Alpha Bank and Piraeus Bank will be invalidated, which include a combination of cash and share exchange.

The trick with shares

Early on Monday, shortly before the finalisation of the competition for TT’s sale, the National Bank and Alpha Bank received a fax message that changed the game. The two banks, because of the support received in the recapitalisation, will not be allowed to submit a bid that combines cash and shares. This fact particularly affects Alpha Bank, depriving it of the advantage of giving the best price.

I.e., the Financial Stability Fund will choose to which bank to sell TT Hellenic Postbank, and the only criterion includes the synergies that will be created and consequences for the stability of the system, plus the decision will not be based on the price. Thus, the advantage is undoubtedly on the side of Eurobank, since it will be able to operate autonomously and be sold with the acquisition of TT. Moreover, a study by TT’s consultant Alvarez & Marshall showed that the best solution is a merger with Eurobank, because of better synergies.

Four offers

Eventually, on Tuesday, all four good banking groups submitted offers: the National Bank, Alpha Bank, Piraeus Bank via Geniki Bank, and Eurobank. Reportedly, offers were designed in such a way that if the last-minute change is deemed illegal, the National Bank and Alpha Bank will be able to have a claim on TT.

Alpha Bank is particularly affected by the intervention of the Troika via the Bank of Greece on this issue, since its management believed that it would win the competition. Therefore, it is not excluded that it will look for other ways to protect its rights.

The Troika, following its intervention in the failure of the merger between the National Bank and Eurobank, is now leading 2-0.

Meanwhile, according to information, former CEO of the National Bank, Apostolos Tamvakakis, who heads a small group of businessmen, has submitted a request to the Bank of Greece for the acquisition of the Investment Bank of Greece IBG. According to banking sources, the price offered to the liquidator of Laiki Bank, which owns the Investment Bank as well, amounted to 70 million euro. The same sources believe that it is unlikely that Tamvakakis will not receive the approval of the Bank of Greece, and noted that he will start his activity on the domestic banking market via IBG. Therefore, they did not exclude the possibility that he will participate in a new round of sales and mergers.