The Hellenic Financial Stability Fund (hereinafter ‘HFSF’ or ‘the Fund’) was founded on 21/07/2010 under Law 3864/2010 as a private legal entity and does not belong to the public sector, neither to the broader public sector. It has administrative and financial autonomy, operates exclusively under the rules of the private economy and is governed by the provisions of the founding law as in force. On a supplementary basis, the provisions of company Law 4548/2018 are applied as in force, provided they are not contrary to the provisions and the objectives of the founding law of the Fund. The purely private nature of the Fund is neither affected by the fact that its entire capital is subscribed solely by the Greek State, nor by the issuance of the required decisions by the Minister of Finance. According to Law 4389/2016, HFSF is a direct subsidiary of the Hellenic Company of Assets and Participations (“HCAP”), however the administrative autonomy and independence of the HFSF is not affected according to the provisions of the Law 4389/2016 and for this reason the Fund is not consolidated in the HCAP’s Financial Statements. The Fund shall comply with the obligations arising from the Master Financial Facility Agreement (hereinafter MFAFA) signed on 15/03/2012 and the FAFA signed on 19/08/2015. According to Law 4941/2022, the Fund’s tenure has been extended up to 31/12/2025.
According to the HFSF Law as amended and currently in force, the purpose of the Fund is (a) to contribute to the maintenance of the stability of the Greek banking system, for the sake of public interest and (b) the effective disposal of shares or other financial instruments held by credit institutions, which is based on a divestment strategy with a specific time horizon of definite and full implementation, which is determined in accordance with Article 8 of HFSF Law, and in principle does not extend beyond the Fund’s termination. HFSF exercises its shareholding rights deriving from its participation in the credit institutions to which capital support is provided by the Fund, in compliance with the rules of prudent management of the assets of the Fund and in line with the rules of the European Union with respect to State aid and competition.
HFSF contribution to the Greek banking system
Since inception, HFSF has actively supported the stability of the Greek financial system through a series of actions and initiatives, the most important of which are the following:
- Enhancement of banks’ capital by €46 billion since 2011, as part of the financial support program for Greece by the institutions, shielding the banking system and the deposits during the crisis period and contributing until today to the maintenance of financial stability and to the availability of sufficient leverage to support the economy
- For the first time, in 2021, HFSF acts as a strategic partner and active shareholder for banks, participating with €395m in the capital increases of Piraeus Bank and Alpha Bank. In the case of Piraeus Bank, the capital increase is one of the the largest European capital market transaction since 2017 and the largest in Greece since 2015. In the case of Alpha Bank, the capital increase is the first share capital increase for growth in Greece since 2011
- 2021 also marked the first time that HFSF participated in a non-systemic bank, Attica Bank
- In addition to the capital support to banks, the Fund has actively contributed to the reduction of Non-Performing Exposures through five main axes:
- First, with the initiative for the creation of the foundation of the ‘Hercules’ solution, which was implemented by the Ministry of Finance and contributed to the reduction of non-performing loans by almost 90% and to the clean-up of banks’ balance sheets
- Secondly, through the study to identify the obstacles to the development of a dynamic NPL market in Greece
- Third, through the proposal to create an action plan to strengthen banks’ coordination regarding the acceleration of the restructuring of large corporate Non-Performing Exposures
- Fourth, by strengthening the risk management framework and culture, as well as strengthening the role and responsibilities of the Chief Risk Officer
- Fifth, through the preparation and socialisation with Greek systemic banks of quarterly asset quality reports, providing useful analysis on key performance drivers and peers’ benchmarking
- The Fund also contributed to strengthening the Corporate Governance framework, through:
- Proposals for the adoption of international best practices
- Establishment of Ethics Committees across the two out of the four systemic banks
- Strengthening the composition and operation of banks’ Boards of Directors through the publication of relevant guidelines
- On sustainability, the Fund recognises climate change as a systemic risk of great importance for the banking sector. In this context, we support banks in evaluating and exploiting opportunities and managing risks primarily related to climate change
- We have contributed to banks’ greater extroversion through contacts with foreign investors in the context of the implementation of our Divestment Strategy. The Fund aims to undertake transactions that will return systemic banks to the private sector by the end of 2025, subject to market conditions – always pursuing the public interest and in compliance with the applicable legal and regulatory framework.
Overall, HFSF has contributed to the transformation, strengthening and prosperity of the financial sector and to the creation of value for the banks.
Within the context of the Divestment strategy, on 9/10/2023 our first transaction was successfully completed and the Fund sold at a premium its entire stake in Eurobank Ergasias Services and Holdings S.A. (“Eurobank”), namely 52,080,673 common registered shares. This followed Eurobank’s initial binding offer, dated 22/09/2023, for the acquisition of the Shares via a targeted share buy-back and a competitive process.
- One month later, on 13 November 2023, the HFSF sold its entire stake in Alpha Services and Holdings S.A., namely 211,138,299 common registered shares, corresponding to 8.9781% of Alpha’s paid-up share capital and voting rights, to UniCredit S.p.A., pursuant to a share purchase agreement entered into between HFSF and UniCredit on 12 November 2023. The Transaction followed the completion of a competitive process launched by HFSF on 30 October 2023, triggered by a binding offer from UniCredit received by HFSF, on 23 October 2023. UniCredit purchased all of the Shares at a price of €1.39 per Share, representing a premium of 9.4% to the undisturbed closing price on 20 October 2023 and a discount of 0.4% to the closing price of the shares on the Athens Stock Exchange on 10 November 2023.
- On 12 November 2023, the Board of Directors of the Hellenic Financial Stability Fund approved, inter alia, the disposal of a stake of 20% shareholding in National Bank of Greece S.A. corresponding to 182,943,031 existing common registered dematerialized voting shares, with an upsize option to increase at its sole discretion by up to 18,294,303 ordinary shares at an offering price ranging between €5.00 and €5.44 per each offer share. The shares were offered by a public offering in Greece and an international offering. The offering was completed on 16.11.2023. HFSF fully exercised its upsize option, thus a total of 201,237,334 offer shares were offered in the offering, at €5.30 per offer share. The offering was oversubscribed on aggregate by approximately 8.04 times. HFSF’s total gross proceeds raised from the offering, before deducting the expenses of the offering borne by the HFSF, amount to €1,066,557,870.20.
- On 10 November 2023, following the third triggering of the DTC law and in accordance with the article 27A of Law 4172/2013, the Ministry of Finance transferred 4,978,524 ordinary registered shares with voting rights to the HFSF without consideration and the Fund’s percentage in the bank’s share capital increased to 72.54%.