Greece’s bank bailout fund is likely to sell its entire 27 per cent stake in Piraeus Bank in early March, two sources close to the process said on Thursday (Feb 22), the fourth such sale in the country’s banking sector since October.

The state controlled Hellenic Financial Stability Fund (HFSF) was set up to recapitalise Greek banks during the country’s decade-long crisis from 2008-2018.

“We are heading for a 27 per cent stake sale...early March,” one of the sources told Reuters on Thursday, referring to Piraeus.

The sale of the HFSF stake in Piraeus Bank will be the latest in a series of similar divestments across Greece’s four biggest lenders, reflecting the progress the banking sector has made since the financial crisis ended.

Piraeus has a market value of 4.9 billion euros (S$7.12 billion), which means HFSF could sell its stake for more than 1 billion euros.

“The initial thought was a sale of up to 22 per cent but after the strong interest from foreign investors the most likely scenario is 27 per cent,” a second source said, adding that the majority would be offered to institutional investors and a smaller part to retail investors.

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The bank said last week that it expects profits to jump in the coming years, with its shares up 20 per cent since the beginning of January.

Shares in Greece’s broader banking sector as measured by the FTSE/Athex Banks index have gained about 16 per cent since the start of the year after a 67 per cent jump in 2023, benefiting from strong economic growth and the country’s recent upgrade to an investment grade credit rating.

Greek lenders cut their bad loan ratios to below 7 per cent in 2023 from 45 per cent in 2016 and hope to distribute a dividend for the first time after 13 years.

Having injected about 50 billion euros into the sector, HFSF began reducing its holdings last autumn. It sold a 20 per cent stake in National Bank (NBG) and 9.4 per cent of Alpha Bank in November and a smaller stake in Eurobank in October. REUTERS