George Georgiopoulos
ATHENS - Reuters
Shares of National Bank erased early losses, climbed 4 percent after Greece's largest lender clinched the biggest ever Greek-Turkish deal to buy mid-sized Finansbank in its eastern neighbor.
National Bank agreed on Monday to pay 2.3 billion euros ($2.8 billion) for a 46 percent stake in Finansbank, with plans to increase its stake in future.
The Greek lender's plan to tap the market for 3.0 billion euros via a rights issue to finance the acquisition weighed on the shares at the open, but an overall thumbs up on the deal sent the stock into positive territory soon after.
"Although a pricey acquisition, it would be EPS (earnings per share) enhancing from day one, even after a capital increase of 3.0 billion euros -- equivalent to 23 percent of NBG's market cap," said analyst Joanna Telioudi at HSBC Pantelakis Securities.
Analysts said the deal would add value to National Bank shareholders in the longer term, pointing to the prospects of Turkey's fast-growing economy, its potential European Union accession and its underbanked market.
"We should not neglect the fact that NBG gains access to a huge, still developing market, maintaining its healthy capital ratios that allow it to further continue its expansion plans," said Marfin Analysis.
National Bank June stock futures were trading 2.9 percent higher at 39.9 euros at 1042 GMT. The underlying shares are up 7.8 percent year to date, giving the bank a market value of 13.06 billion euros.
National Bank Chief Executive Takis Arapoglou told analysts during a conference call on Tuesday he was optimistic on the deal and future prospects and synergies.
"It is fully in line with our strategic vision to enhance our footprint in the area," Arapoglou said. He said National would embark on an investor roadshow from April 5 to promote the deal to investors. "As of tomorrow we will start a road show in London and New York and possibly Boston and Frankfurt."
National's Chief Financial Officer Anthimos Thomopoulos told analysts NBG would support Finansbank's growth in the local and regional market, expecting "to see a boost from NBG's experience in mortgage lending in a market that has just started growing and growing rapidly in Turkey."
