THE TROIKA IS ASKING THE GREEK BANKS TO SELL THEIR OPERATIONS ABROAD A bank for the price of a villa

If you're looking to buy a villa, you might want to wait for a while. Soon, for a similar amount, you might be buying the Romanian subsidiary of a Greek bank.

Last week, Greece's international creditors and the representatives of the Competition Council of the European Union have asked Greek banks to sell their non-banking operations in Greece, as well as their foreign subsidiaries.

As a result, Greek banks may be forced to sell their businesses in Romania. The four largest Greek banks, National Bank of Greece (NBG), Eurobank, Alpha Bank and Piraeus Bank, are controlling almost 14% of the assets of the Romanian banking system.

We already have the experience of the embarrassing sale of major Romanian companies just because the IMF held a gun to our head.

Since at a time like this, interest in acquisitions is low, it's very easy to imagine that the Greek banks will choose to sell their branches for a pittance.

Perhaps not for the price of a villa, that may be an exaggeration.

Please don't be mad at us: we are the BURSA newspaper, we are not the IMF, or the European Commission, or the ECB.

The defender of the competition-based market - the IMF - has long ago become the one that distorts the market through force and pressure.

In Romania, NBG controls Banca Românească, Eurobank is the majority shareholder of Bancpost, and Alpha Bank and Piraeus are present through subsidiaries operating under the same name as their parent banks.

Nicolae Cinteză, the head of the Oversight Division of the National Bank of Romania, told us that the Central Bank has not yet been informed about the potential sale of any bank assets controlled by the Greek lenders in Romania.

"Any deal that involves more than 10% of the share capital of a bank requires approval from the NBR", he explained.

Nicolae Cinteză also went on to say that next month, the representatives of the Oversight division of the Greek Central Bank may visit Romania to meet their Romanian peers.

Economic analyst Aurelian Dochia considers that such sales are no surprise to anybody, and the sale process could take a while. The acquisition of the subsidiaries would be made by banks which are already present in South-Eastern Europe, which will lead to a consolidation of the banking sector in the region, despite his opinion. The economist does not expect investment funds to make any bids on their own, but rather in associations.

The Troika, made up of the European Commission (EC), the European Central Bank (ECB) and the International Monetary Fund (IMF), has asked for a schedule of the sale process, pushing for the sale of the subsidiaries of the Balkan region, according to Greek publication Kathimerini.

Kathimerini also reveals that Gert Ian Koopman, the Director-General for State Aid of the European Community, was in Athens, before Athens made the request, meeting with the managers of the Greek banks on the subject of the business plans which they will have to present, as part of the bank recapitalization plan.

Greece's bailout plan provided that all of the country's four banks, NBG, Eurobank, Alpha Bank and Piraeus Bank, would be recapitalized, for a total amount of 27.5 billion Euros. Lenders that fail to raise at least 10% of the necessary capital from private sources, will be forced to relinquish control to the Greek Financial Stability Fund (GFSF), which manages 50 billion Euros, granted by the international financial institutions for the consolidation of the local banking sector. The capital needs of the Greek banks has been appraised at 9.7 billion Euros for NBG, 4.5 billion Euros for Alpha Bank and 7.3 billion Euros for Piraeus Bank, 5.8 billion Euros for Eurobank. While the former three managed to raise at least 10% of the amount needed for recapitalization using private sources, Eurobank has stopped trying to meet that goal and opted to resort to the GFSF in order to obtain it. Thus, the authorities in Athens will take over the control of the Greek bank and its subsidiaries, including those in Romania.

According to the Greek press, Gert Ian Koopman has described to the managers of banks the business plans that they must adhere to. This week, the General Competition Department of the European Commission is set to send written instructions to the local creditors about the business plans.

The representatives of the banks claim that the sale of the units in South-Eastern Europe is a mistake, especially during this difficult time. While they concede the need for adjustments and possible sales, they also stress the fact that maintaining the presence in the region is "crucial", not just for their own survival, but for the Greek economy as well

A fifth Greek bank present in Romania, ATE Bank, has been acquired last year, by Piraeus Bank. Following this transaction, ATE Bank România was divided, with part of its assets to be acquired by Piraeus Bank România, while the rest were acquired by businessman Dorin Umbrărescu for ten million Euros. Marinel Burduja, the former first vice-president of Raiffeisen Bank România, was the "architect" of the transaction, which was held last month.