Greece missed another billion-dollar deadline yesterday, this time in Turkey.
National Bank of Greece, the country’s largest lender, had set itself a target in March to reduce its stake in Turkey’s Finansbank by Tuesday, as part of demands from EU regulators to cut its holding to 60 percent from 100 percent this year.
The disposal, a condition of the lender’s bailout, may raise about $1 billion for National Bank of Greece, according to Cagdas Dogan of BGC Partners Inc. That’s equivalent to more than half the size of the payment to the International Monetary Fund which Greece missed last night.
While EU regulators had given National Bank of Greece until year’s-end to reduce the stake, the bank on March 20 announced that it aimed to have the process completed by end June. NBG’s commitment to Directorate General of Competition is still standing, a spokeswoman for Finansbank said by e-mail yesterday, “and we will continue to make the necessary statements in due course.”
The company had planned to offer the Finansbank shares to investors in a public offering. The bank may have to find a buyer for the entire stake or accept a lower price for its holding, said Aykut Ahlatcioglu, banking analyst at Istanbul-based broker Oyak.
“A direct sale is now more likely,” said Ahlatcioglu. “National Bank of Greece did not want to lose a majority stake. However, if the Greek economy worsens further they could be in survival mode, which could change their thinking.”
Paula Hadjisotiriou, the Athens-based lender’s former deputy chief executive officer, said in November the company was reluctant to reduce its holdings in Finansbank. NBG’s chairman and chief executive officer resigned in March, according to the bank’s website, and Hadjisotoriou subsequently resigned as a member of Finansbank’s board, according to a June public filing.
Officials at National Bank of Greece didn’t immediately respond to calls seeking comment on the sale process.
Aside from a changes of management and government in Greece, efforts to sell the Turkish lender were also complicated by political turmoil in Turkey that has triggered a rout in stocks stocks and bonds.
Finansbank was little changed at 3.02 liras as of 11:56 a.m. in Istanbul. The stock is down 2.6 percent this year for a market value of about $3.2 billion.