National Bank of Greece SA, the nation’s oldest and largest lender, is exploring a sale of London-based NBGI Private Equity Ltd. to raise capital, according to two people with knowledge of the matter.
National Bank is working with investment bank Cogent Partners, which specializes in secondary private-equity transactions, said the people, who asked not to be identified because talks are private. The Athens-based lender is conducting a strategic review, which could be concluded in the first half of this year, to potentially sell NBGI or its assets, one of the people said.
“We expect a busy agenda in terms of the disposal of non-core assets and international banking units,” Maria Kanellopoulou, an analyst at Athens-based Euroxx Securities, said in a telephone interview today. “The bank has stated it is going to proceed to a few capital-strengthening initiatives.”
Banks in Europe and the U.S. including JPMorgan Chase & Co. (JPM:US) and Credit Agricole SA have been selling or scaling back their private-equity arms because of higher capital requirements. NBGI, which was founded in 2000, manages about 900 million euros ($1.2 billion) in European private-equity, venture and real estate funds, according to its website.
National Bank’s shares rose in Athens trading today after five days of decline, closing 5.4 percent higher at 3.33 euros, giving the company a market value of 8 billion euros. The shares earlier rose as much as 7.3 percent.
Spokesmen for National Bank, NBGI and Cogent declined to comment about a possible sale.
National Bank is 84 percent owned by the Greek state after receiving a bailout of about 8.5 billion euros. Greece sparked the European debt crisis in 2009, when an incoming government revealed that the country’s budget deficit was bigger than previously estimated, exceeding fivefold the euro area’s permitted limit.
Greece went on to get two bailouts from the European Commission, the European Central Bank and the International Monetary Fund, amounting to 240 billion euros. This included 50 billion euros for the country’s lenders, which took losses in the 2012 sovereign debt restructuring, the largest in history.
Under the terms of those bailouts, Greece’s banks are required to maintain a core Tier 1 capital ratio, a measure of financial strength, of at least 9 percent. Bank of Greece Governor George Provopoulos said this month the central bank will soon announce how much additional capital Greek banks need after a review of their loans by BlackRock Inc.
National Bank on Nov. 27 reported that it’s Tier 1 ratio stood at 9.4 percent and its non-performing loans were 22 percent of the total at the end of the third quarter. The bank sold a 66 percent stake in its real estate unit to London-based Invel Real Estate Partners for 653 million euros in November as part of its efforts to bolster its capital.
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