Piraeus Offers EU701 Million for ATEbank, Hellenic

By Maria Petrakis and Natalie Weeks
(c) 2010 Bloomberg News
Thursday, July 15, 2010; 12:00 AM

July 15 (Bloomberg) -- Piraeus Bank SA, Greece's fourth- biggest bank, offered to buy government stakes in two lenders for 701 million euros ($897 million) after Finance Minister George Papaconstantinou urged the country's banks to merge.

Piraeus offered to purchase 77 percent of Agricultural Bank of Greece SA and 33 percent of Hellenic Postbank SA, Chief Executive Officer Michalis Sallas told a press conference in Athens. The combined bank would be Greece's biggest, he said. The government hasn't so far responded to Piraeus's plan.

Papaconstantinou has urged lenders to adjust to the new environment as the country struggles through its first recession since 1993 and implements austerity measures designed to bring the European Union's second-biggest budget shortfall under control. The finance minister has said banks need to take decisions to "ensure their competitiveness."

EU regulators are stress-testing 91 of the region's banks in an effort to alleviate concerns about their ability to absorb losses. The results are scheduled to be released on July 23.

Banks have fallen 39 percent on concerns about their holdings of Greek bonds and a government default or debt restructuring. Before today, Agricultural Bank had dropped 45 percent in Athens trading this year for a market value of about 969 million euros. Hellenic Postbank had tumbled 39 percent to value the lender at about 768 million euros. Piraeus has fallen 50 percent this year, making it the worst performer of the 20 largest Greek companies.

Shares in EFG Eurobank Ergasias SA, Greece's second-biggest bank, gained as much as 7.4 percent and National Bank of Greece SA, the largest, added as much as 5 percent. Alpha Bank SA, the third largest, advanced 5 percent.

© 2010 bloomberg.com