The Hellenic Financial Stability Fund (HFSF) is set to close one year earlier than planned, wrapping up operations by the end of 2024 instead of 2025 as originally scheduled. The Greek government is planning to absorb HFSF into the Hellenic Corporation of Assets and Participations (HCAP), contingent upon resolving two significant issues: the sale of its 18% stake in the National Bank of Greece (NBG) and the restructuring of Attica Bank.

“According to its founding law, the HFSF was set to last until December 31, 2025. However, it has already completed 90% of its mission, including divesting from Eurobank, Alpha Bank, and Piraeus Bank. What remains is an 18% stake in NBG and the situation with Attica Bank. The government aims to resolve these issues by the end of 2024, at which point the HFSF will be absorbed by HCAP,” stated Finance Minister Kostis Hatzidakis during the presentation of a new bill. This bill will enter public consultation next week and is expected to pass by July.

Regarding the NBG divestment, Prime Minister Kyriakos Mitsotakis mentioned in a recent Bloomberg interview that the government still holds an 18% stake in NBG and plans to address this in the fall, depending on market conditions. Market opinions vary: some predict a full sale of the stake by HFSF, while others believe the government may retain a small portion of its investment in the bank.

The successful sale of 22% of NBG, raising over €1 billion with a final price of €5.30 per share, indicates readiness for a second transaction. The initial offering attracted strong interest, with NBG’s international book covered 9.5 times over, gathering €8.1 billion in offers from top global institutional investors. The Greek book was covered 2.9 times, with offers totaling €450 million.

Simultaneously, the restructuring of Attica Bank and its merger with Pancreta Bank to create a fifth banking pillar is progressing. Following DBRS’s report on the required capital to place non-performing loans into the Hercules program, existing shareholders will express interest in participating in a capital increase. Initially, participation will be proportional to current holdings. Attica Bank’s shareholder structure is as follows:

• HFSF holds 72.5% or 36,279,370 shares.
• e-EFKA holds 7.6% or 3,781,986 shares.
• Pancreta Bank (controlled by Thrivest) holds 5% or 2,506,921 shares.
• Thrivest holds 4.4% or 2,211,989 shares.

Key to the process will be the handling of unsubscribed shares, with third-party investors likely to join. Their share will be small, allowing Thrivest to gain majority control. Attica Bank will announce Q1 2024 results on June 28, expected to show a positive credit expansion of around €200 million, according to CEO Eleni Vrettou.

HFSF Employees’ Future

Employees of the HFSF will be transferred to HCAP by the end of 2024, subject to their agreement, following the issuance of the relevant ministerial decision.

According to the latest data, HFSF employs 46 full-time staff. Due to the fund’s limited lifespan, all employees, except for four lawyers, are on fixed-term contracts and covered by collective labor agreements. The finance ministry’s draft bill will stipulate that they will transfer to HCAP under their existing contracts.