A cheap Greek banks sale is coming

Greek banks are to be nationalized or seized by German giants, after the Greek salvation program that led to almost 75% decrease of the private debt of bankrupted country. After being for years pressed by government to buy its bonds, the banks now are in heavy losses amounting to $37 billion. This missing money has "eaten" the most of banks' own capital. So now re-capitalization is needed for them to survive. There is 2 possible sources of new capital. The first is the government that bankrupted the banks to nationalize them. It will be a funny decision. The government stops its debt-payments and receives as award the property of the banks it bankrupted...:) But this option is some difficult to realize as the government has no money, and has much other priorities in social system. So the possible way of re-capitalizing the banks is to attract foreign investors. But as the situation in Greece is very unstable, so it is risky to invest there. Therefore the price of banks will be low. So now having much free cash investors can buy very cheap and acquire strategic positions that can return a big profit when economy starts to revive. In EU the potential buyers with ready cash are German banks. They not only have money, but also are not pressed by government to buy bonds. In some other countries exactly this happens - in Spain and Italy for instance banks have to buy bonds to keep the government alive. Something similar is in France. So The Germans have no much competitors in EU. Out of EU there are some possible investors - like Russia, China and entire BRIC group, that also can be involved in cheap-banks-buying...

But there is a question more to ask. Do the Greek banks are the best investment? It is absolutely possible in near future to appear much more "tasty bits". The pressed by government banks in other indebted countries are in very similar to the Greek banks situation. They are in danger of bankrupt, if their government defaults. So very soon we can see very cheap Spanish and Italian banks on sale... :)



Interesting sites: Добри Божилов