High demand is evident with the opening of the offer book for the allocation of 20% of National Bank from the Financial Stability Fund. As reported by Reuters, the full amount of the deal has already been covered, including the right to increase the size of the offer (upsize).

It is recalled that 17% will be allocated outside Greece to institutional investors through private placement and 3% in Greece to individuals. The offer price range was set between 5 and 5.44 euros.

As Money Review wrote earlier, with a combined offer in Greece and abroad, 182,943,031 shares will be made available by the HFSF, corresponding to a percentage of 20% (out of a total of 369,468,775 shares or 40.39% controlled by the Fund) of the share capital of the National Bank.

The tender book for both the Greek and international tenders opened today and will close on November 16 for both procedures.

The offering price range was set at between 5 and 5.44 euros per share and is lower than the close of 5.46 euros of the share price last Friday, discounting the sale of the 20% discount. It should be noted that the capitalization of Ethniki exceeds 5 billion euros (yesterday the share closed at 5.482 euros, recording an increase of 0.77%). The book value of the bank is 7.3 billion euros and therefore trades at 0.68% of its book value.

According to estimates, demand for participation in the share offering will be high and it is expected that the offer book will be covered by approximately two times based on investor interest, as explored to date by Jpmorgan acting as an advisor to the HFSF.

The price will be common to all investors participating in the Greek public offer, but it will be determined based on the outcome of the international offer after the end of the offer book period on November 16, 2023. Investors in the Greek public offer will register to the maximum value of the value range.

As announced by the HFSF, the Fund can, at its discretion, increase by up to 18,294,303 the shares that will be allocated, by exercising the “upsize option” and thus raising the percentage that will be allocated to 22 %. The revenue to be collected by the State from the sale of the shares of National Bank is expected to exceed 1 billion euros, with the prospect of reaching up to 1.08 billion euros if 22% of the bank is sold in the upper range of the sale price . After the completion of the sale and if the upsize option is also exercised, the Fund’s percentage will be limited to 18.39% (from 40.39%), raising the percentage of National Bank shares held by private investors to 81.61%, from 59.61% today.

The offered shares will be offered in Greece to private and specialist investors and outside of Greece through a private placement to institutional and specialist investors, and the distribution of the shares will be divided between the Greek public offering and the international offering as follows:

(i) 15%, corresponding to 27,441,455 offered shares, will be distributed to investors who have participated in the Greek public offering. (ii) 85%, corresponding to 155,501,576 offered shares, will be allocated to investors who have participated in the international offer.

HFSF reserves the right to modify said allocation percentage at its discretion, based on the demand to be expressed in each tranche of the offer, provided that any such modified allocation of the offered shares between the international offer and the Greek offer will not result in the public offering in Greece receiving a percentage lower than 15% of the offered shares. As the Fund’s announcement clarifies, the offered shares initially allocated in the international offer can be reallocated to investors participating in the Greek offer, as long as the orders submitted to the latter exceed the above initial allocation and support this reallocation. Conversely, offered shares that were initially allocated, but not ultimately taken up in the Greek public offering, may be reallocated to investors participating in the international offering.

The sale of shares follows the strong results announced by the management of National Bank last week, setting the bar high for profitability this year. The management of Ethniki has set a target of distributing a dividend of 30% on the profitability of 2023, with the prospect of further increase in the coming years, emphasizing the achievement of a high return on equity, which increased to 20.8% from 17.8 % a year ago. The bank’s strong points are its high capital position, with the basic capital adequacy ratio at 17.9% and the total ratio at 20.3%, as well as the high profitability that jumped to 829 million euros, the high liquidity available to the bank and the progress made in reducing non-performing loans, which have fallen to 1.1 billion euros, making the corresponding ratio close to European levels (3.6%), with the coverage ratio from accumulated provisions to amount to 93.5%.