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The management of the Greek Piraeus Bank submitted to the Ministry of Finance a proposal to purchase shares of two state banks. Piraeus is interested to buy 33.04% of Postbank (TT) and 77.31% of the agricultural bank ATEbank. The price offer amounts to € 701 million paid in cash. According to the chairman of the purchasing bank Michalis Sallas this deal would benefit the shareholders of the three banks as the merger will result in the largest banking group in the country with assets totaling € 105 billion, net loans of € 69 billion and € 64 billion in deposits .   

Michalis Sallas stressed that the proposal for merger is the response to the government’s call for restructuring the banking sector in Greece and will bring additional benefits of the savings planned in the project. According to the Chairman of Piraeus Bank the banking group will optimize in the next three years the activities of the banks involved in it with € 300 billion per year – cost reduction will be around € 200-220 billion and additional revenue will range between € 80-100 billion per year.  

The proposal to purchase shares of the two state banks reflects the desire of Piraeus Bank to respond to the call for the banking system restructuring and contribute to the economic recovery and stabilization of Greece. Sallas stated that this will have positive impact on the  international markets and will restore the trust in the Mediterranean country.

The official statement of the Ministry of Finance states that the Government will consider the proposal of Piraeus within the legal procedures provided in the public interest and consistent with bank stability. The Financial Minister George Papakonstantinou declared his position in a statement to the parliament during the report on the implementation of the budget for the first half of 2010: “It is obvious that our country should have less, but more stable banks. This is the main point of the discussions we lead with all interested parties”. Asked by a journalist how secure is the public interest in the deal, provided that Piraeus has received financial support of € 750 million from the € 28 billions rescue package for the banking sector, the government spokesman George Pedalotis replied that the proposal is still being analyzed according to legal requirements.

Meanwhile, officials of the two state banks – Postbank and the Agricultural bank – threaten to strike and boycott if the government decides to accept the proposal for merger of banks. ATEbank’s employees sent an open letter to the mass media announcing that the first 24-hour work strike in protest to the proposal will take place that Friday, July 16. “We warn you – if only dare you,” declares the union of the employed in the agricultural bank. “The difficult times facing the country can not force us to become just a victim of numbers,” say the employees of Postbank. They defined the merger proposal as “shocking” and called the Prime Minister George Papandreou to consider the issue.