July 2, 2012 / 1:33 PM / in 5 years

Credit Agricole in talks over Greek bank sale

ATHENS/PARIS (Reuters) - Credit Agricole (CAGR.PA) is in talks to sell all or part of struggling Emporiki Bank as it continues its drive to resolve the Greek risk that has dogged it in recent months, a Greek lender and a source familiar with the matter said on Monday.

Greece’s biggest lender, National Bank (NBGr.AT), said in a bourse filing that it was in talks with the French bank over a “strategic alliance” regarding Emporiki. A Credit Agricole spokeswoman declined to comment.

Europe’s No. 4 bank by assets has been scrambling to scale back its 4.6 billion euro ($5.84 billion) exposure to Emporiki after concern that a Greek exit from the euro zone would prompt massive writedowns and force a capital increase.

“There were discussions between the managements of National and Credit Agricole regarding the potential for future strategic alliances, which are at an initial phase,” National said, adding that it would inform investors if the talks bore specific results.

National is the first lender to confirm it is in discussions with Credit Agricole over a possible takeover of Emporiki, partial or otherwise. Credit Agricole may decide to retain a minority stake in the Greek lender, which at the end of last year had 1.3 million customers and 22.3 billion euros in outstanding loans. Last week Alpha Bank denied a report that it was in talks to acquire Emporiki assets.

Credit Agricole shares jumped 8.4 per cent on Monday, reaching 3.76 euros at 08:07 a.m. EDT (1207 GMT), their biggest percentage rise since January. The shares are still down 14 percent this year and touched a record low in early June.

The news of a potential sale is the latest in a series of positive Greece-related developments for the French bank in recent weeks. In early June sources said Emporiki had gained access to emergency liquidity funds provided by Greece’s central bank to prop up the country’s ailing lenders.

PREPARING FOR THE WORST

Later in the month the bank said it was hiring Xavier Musca as executive vice-president in charge of international retail banking. Musca, who played a key role in the shadows during former French President Nicolas Sarkozy’s handing of the euro zone crisis, could already be making his mark with the Emporiki sale talks.

“Clearly, at Credit Agricole’s share price today, there is some huge value-destruction component of the Emporiki subsidiary, so I wouldn’t rule out the possibility of them selling it for $1,” one London-based analyst said. “What they’re clearly doing is preparing for a worst-case scenario and hoping for the best - and that’s probably not a bad management strategy in these uncertain times.”

Credit Agricole trades at 0.2 times its book value, making it one of the European sector’s very cheapest by that measure.

Greek media reports suggest that two other Greek lenders, EFG Eurobank EFGr.AT and Alpha Bank (ACBr.AT), have also declared an interest in Emporiki.

However, a Paris-based source familiar with the matter indicated that there were more suitors: “There have been expressions of interest ... and not just from three banks.”

The source added that a deal had not been done yet and that there were layers of “complexity”, including the need for solvent partners and liability guarantees.

Credit Agricole’s moves to scale back its exposure and minimize any impact from a Greek exit from the euro have also included a move to transfer shares in Emporiki’s Albanian, Bulgarian and Romanian units to the parent company.

The flight from Europe’s most indebted countries has not been restricted to the banks, however. French company Carrefour (CARR.PA), Europe’s biggest retailer, last month said that is to pull out of Greece by selling its stake in a Greek joint venture to local partner Marinopoulos, which will become its franchisee.

Separately on Monday, Cyprus, which applied for a European Union bailout last week, acquired 1.79 billion euros of shares in the island’s second-largest lender to help it to meet minimum capital levels depleted by exposure to Greece.

Reporting by Harry Papachristou, Christian Plumb and Lionel Laurent; Editing by David Goodman

Our Standards:The Thomson Reuters Trust Principles.
0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below