Attica Bank CEO replacement expected today – The background

By Leonidas Stergiou

A meeting of the board of directors of Attica Bank is scheduled for today, which is expected to approve the replacement of the current managing director, Mr. Michael Andreadisfrom the lady Eleni Brettou. This is an administrative change, which has been expected for some months and which is taking place at a critical time for the Bank.

Mrs. Vretto, coming from high-ranking positions in Lambda Development and Piraeus Banktakes over her helm Attica Bank in a critical period. After the conflicts that caused the intervention of the Bank of Greece asking for the tones to be lowered and for the shareholders to commit in writing to support the operational and capital plan last April, Attica Bank failed to submit to the supervisory authorities the details of these plans in end of April. So, he got an extension until the beginning of September, but still the house DBRS has not delivered the evaluation of all the securitizations from which the losses and additional needs will arise.

According to information, the house has already informed the management of Attica Bank about the results of the evaluations for the two smaller securitizations Astir 1 and Astir 2 (a total of approximately 700 million euros). By Friday, September 2, it is expected to give the results for the Omega securitization of 1.3 billion euros.

Time is pressing

The schedule, however, is quite tight considering the change of management within the week and the receipt of rating by DBRS on Fridayi.e. close to the end of the extension to Attica Bank announces the total capital needs and the corresponding action plans to the supervisory authorities.

For this reason, it is possible to grant a short extension of a few days.

At the same time, up to the general meeting is expected at the end of September or the beginning of October for the approval of the initially planned share capital increase of 365 million euros.

In addition, time is pressing for inclusion of the three securitizations of 2 billion euros (Astir 1, Astir 2 and Omega) in the scheme “Heracles 2” within October. It is noted that the existing securitization scheme of Herakles 2 red loans expires October 2022 and the Department of Finance, such as has been published by Capital.grdoes not currently appear to be considering a show, or at least maintains his reservations.

Scenario for partial capital increases

The same sources who are close to the developments state that Mrs. Brettou is a person generally accepted by the shareholders, who are committed to cover the additional capital needs. What is going to be discussed in the next period is the method of coverage. In other words, there is the scenario of partial capital increases, which will also be determined by the additional amount of needs. For example, in addition to the already decided capital increase of 365 million euros, it is possible that another one or two more will be required which will take place in2023-2024. Besides, the planned capital increase of 365 million euros, due to legal procedures, may take place at the end of the year or at the beginning of 2023. However, after the completion of the partial capital increases, the market estimates that the HFSF’s percentage is well below 50% and close to the current percentage of the private shareholder, i.e. the Ellington scheme (25%). EFKA owns 10%.

Eleni Vrettou

Mrs. Eleni Vrettou, who has over 20 years of experience in the banking sector both in Greece and abroad, will be called upon to deal with this suffocating schedule and balances. Until today, she was Chief Strategy & IR Officer at Lamda Development from May 1, 2022, when she left as a member of the Executive Committee of Piraeus Bank as Senior General Manager, Chief of Corporate and Investment Banking. Previously, he held executive positions in the HSBC multinational group in Greece and the United Kingdom, while he has previously also worked in the areas of Risk and M&A in America. He holds a Bachelor of Science in Economics from The Wharton School of the University of Pennsylvania.

Michalis Andreadis

Mr. Michalis Andreadis was chairman of the Audit Committee of Attica Bank and was selected as interim CEO in February, when the previous management of Mr.Theodorou Pantalakis. Mr. Andreadis was supported by the main shareholder of the Bank, the Financial Stability Fund, but also by the outgoing management. It was preceded by the process of the Deferred Taxation Act due to losses and the entry of the private schemeEllington-TMEDE.

After about a month, the conflicts and cooperation difficulties led to the intervention of the Bank of Greece in April, which called on the management of Attica Bank to tone down, while at the same time asking the shareholders for a written commitment to support the bank and the capital increase. It was preceded by the reorganization of the board of directors, limiting the number of members on the board of directors. representing the private shareholder arm. From 5 out of 11 members, it was reduced to 3 out of 11. Mr. Andreadis, as an executive member (CEO) belonged to the majority supported by the HFSF, while to the 3 members who represented the private shareholder (Ellington) he belongs, as an executive member , the Acting Executive Councilor madam Irini Maragoudakis. The other members, such as the president (Mr. Konstantinos Makedos) are non-executive members. Also, the representative of the HFSF, Mr. Abraham (Minos) Mosesis a non-executive member.

It seems that this scheme limited the power of the private shareholder, causing coordination problems and delays. The main disagreement was that the main shareholder and the one who paid and acquired 63% of the Bank was the HFSF, which wants to ensure the public money invested through the business plan and the resolution of chronic problems. The private person’s counterargument was that he would be asked to pay the additional damages and the participation of the HFSF for the benefit of the State in order to privatize the Bank.

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