Fairfax’s NBG interest hits snag

Banks will have to rush to meet the deadlines set for their recapitalization program and can expect no amendments to the terms, as Finance Minister Yannis Stournaras on Wednesday banished all talk of changes to the conditions provided for in the country’s bailout agreement with its creditors.

“The procedures for the restructuring of the Greek banking system are following the existing legal framework,” Stournaras said just a few hours after Canadian investment fund Fairfax Holdings was confirmed to have expressed an interest in taking part in the recapitalization of National Bank of Greece (NBG). The country’s biggest lender confirmed the Canadian fund’s expression of interest in a bourse filing.

However, Fairfax also set a number of conditions for its participation, including changes to the terms of the recap process. Stournaras’s intervention was aimed at putting an end to repeated calls to change the framework of the procedure.

NBG sources said that the proposal is under examination. They branded it “interesting” but stopped short of offering any details. They did however add that the proposal cannot be approved or rejected by the bank alone, as it will have to be studied by the authorities.

Kathimerini understands that the proposal by Fairfax, which also controls 20 percent of listed Eurobank Properties, was submitted to NBG and the government a few weeks ago, but the authorities had viewed it in a negative light from the outset as it asked for a change to the recap terms, which cannot take place simply for National’s sake, hence Stournaras’s immediate reaction to reports concerning the Fairfax proposal.

Greece’s creditors have also rejected NBG’s request for a postponement to its recapitalization so that its merger with Eurobank Ergasias can be completed first – expected within June – before the single lender goes ahead with its share capital increase. An informal extension of a few weeks however could be granted, according to sources.