(Bloomberg) -- Greek banks are ready to spend money on deals abroad after emerging from years of painful restructuring, said the top executives of the nation’s largest lenders.
The country “needs stronger, bigger banks,” Piraeus Bank Chief Executive Officer Christos Megalou said Monday during a panel discussing organized by Bloomberg. “All of us are looking at projects outside of Greece,” he said.
His comments were echoed by Alpha Bank CEO Vassilios Psaltis, National Bank of Greece CEO Paul Mylonas and Eurobank Ergasias Service and Holdings SA chief Fokion Karavias, who added that cross-border consolidation in the industry would be welcome by all stakeholders in Greece.
Greece has been at the forefront of a Europe-wide effort to return lenders to full private ownership. In little more than a year, the state has exited three of the country’s biggest lenders and largely divested its holding in a fourth. The disposals, which netted €3.5 billion for the government, effectively privatized an entire industry.
The Greek sales have ushered in a new era for European banking as governments from Ireland to Italy and from the UK to Germany sell banks they have held since the massive bailouts about a decade and a half ago. That’s possible because soaring bank valuations promise decent price tags while gaping budget holes mean many governments are scouring for fresh income sources.
“Banks in Greece have excess capital at the moment,” Karavias said on the panel. They will use it to finance growth, pay some back to investors — and to look for acquisitions, he said, pointing to “the areas of banking, insurance and asset management” as most interesting.
He also cited purchases in Bulgaria and Cyprus in recent years as evidence that Greek banks are becoming active consolidators. Eurobank earlier this year agreed to raise its stake in Cyprus-based Hellenic Bank and said it plans to bid for all outstanding shares after completion of that deal.
Alpha Bank CEO Psaltis said while the journey for banks had been very difficult, they’re finally in a good place, with bad loans no longer a major concern. Alpha Bank about a year ago entered a partnership with Italy’s UniCredit SpA that created the No. 3 lender in Romania. Under the accord, UniCredit also agreed to buy the Greek government’s 9% holding in Alpha Bank. Psaltis and UniCredit CEO Andrea Orcel have portrayed their accord as an alternative way to promote bank integration in Europe.
Read also: UniCredit, Alpha Bank Chiefs Eye Romania Growth After Tie-Up
The panelists agreed that cross-border consolidation in Europe was key to making lenders in the region more competitive, particularly in the large countries, though NBG’s Mylonas said he doesn’t see that happening as soon as some of his colleagues.
Karavias said that all stakeholders in Greece would welcome more cross-border deals. Domestic consolidation, however, was unlikely as the government seeks to promote more competition in the market. Bank of Greece Governor Yannis Stournaras, speaking at the same event, underlined that view.
“We need more competition,” the central banker said. There is a very high concentration in the sector, so “we need new players.”
--With assistance from Sotiris Nikas.
(Adds central bank governor’s comment in last paragraph.)
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