Of Leonida Stergiou
With the intervention of the Bank of Greece, the tones fell between the members of the management of Attica Bank, with the aim of full privatization through a new capital increase or, if necessary, another capital increase.
The plan has already been delayed. The capital increase in order to become a private major shareholder should have been done by the end of March. However, the evaluation report was delayed and it is no longer expected earlier than the end of April.
Therefore, the picture of losses and the necessary funds in order to start the growth processes are expected from May.
Higher losses than expected
The Ellington side, with the lowest stake in equity today, has been calling for more involvement in audits to calculate losses, which are reportedly higher than expected.
On the other hand, the HFSF, as a major shareholder, claims the first say and the definition of the procedures, as it has contributed with multiple funds supporting the transition period until the complete privatization of the Bank.
However, the Ellington-TMEDE side is the one that will finally put the funds in the next increases to get the current percentage of 68% of the HFSF.
In terms of additional losses, market sources estimate them at around € 120 million, although this amount has not yet been estimated as the assessment report is pending.
Most of the losses are estimated to come from the assessment of red loan securitizations, where the Bank cooperates with Ellington, for example, with the Omega transaction (1.3 billion euros).
As announced last September, Ellington would suggest selling medium and low-end securities (5% of the securitization) to funds.
The two sides
The controversy seemed to peak when about three weeks ago, the board of directors of Attica Bank was reorganized, reducing the number of members to the board. representing the private shareholder. From 5 to 11 members, it was reduced to 3 to 11.
In the BoD there are executive and non-executive members. There are only two executive members, namely the new CEO, Mr. Michalis Andreadis, and the Executive Director, Mr. Irini Maragoudaki.
The other members, such as the president (Mr. Konstantinos Makedos) are non-executive members. Also, the HFSF representative, Mr. Abraham (Minos) Moses, is a non-executive member.
It seems that this scheme limited the power of the private shareholder, causing intensifying conciliation problems and delays, resulting in the intervention of the Bank of Greece last week. The tones finally fell, with the aim of completing the evaluation and the plan for full privatization of the Bank.
And while there is interest from the Ellington-TMEDE scheme to get an accurate picture of the additional losses that will determine the money that will be called to put in the capital increase (or even one more), the HFSF is what currently has 68%. In the previous share capital increase by 240 million euros, the HFSF contributed with 152 million euros, while Ellington with 9.8 million euros and TMEDE with 52 million and EFKA with 25 million.
The Fund, as a majority shareholder, puts as a primary role the effort to ensure and operate the bank’s business plan, the solution of its chronic problems and its transformation, as well as the safeguarding to the maximum extent of the public money invested in its rescue.
Consequently, its role can not be merely ancillary but essential in the course of the bank’s transformation until it is on a steady path and the prospect of the State getting its money back and being privatized again is ensured.
The objection of the individual is that he will be asked to pay the additional losses and the participation of the HFSF for the benefit of the State in order to privatize the Bank. At the same time, there are the supervisory authorities, whose main goal is the consolidation, financial stability, strengthening, development and reliability of the banking system.
Supervision and goal
The privatization of Attica Bank, after the conversion of deferred taxation into a final receivable in favor of the State, was a top priority of both the BoG and the ESM. That’s why the supervisor intervened and the tone dropped to start the process. This, of course, is closely monitored by the supervisory authorities.