By A. Doga
A simmering feud between the Hellenic Financial Stability Fund (HFSF) and the management of National Bank of Greece (NBG), the country’s largest financial institution, appears ready to heat up again this week, with the former’s general council set to convene on Monday on the very issue of NBG's corporate leadership.
A last-minute compromise last week over a new chairman and CEO for NBG, along with new board members, saw the HFSF grudging acquiesce to the candidates promoted by the bank’s management. Nevertheless, the HFSF very publicly warned that it could convene a general shareholders’ assembly at any time.
HFSF is an independent and memorandum-mandated Fund that holds more than 40 percent of NBG’s shares after the latest recapitalization of the Greek banking system.
The status quo, however, lasted only a few days, as a high-profile statement by Deputy Premier Yannis Dragassakis, followed by an intervention by the new government spokesman, lent weight to the speculation that the government wants NBG CEO Leonidas Fragiadakis to resign. The latter, a well-known banking executive, was the choice of NBG’s board to run the venerable credit institution.
While speculation in the Greek capital is extensive over which side is backing whom in the leadership reshuffle at NBG, as well as the reasons behind the support or opposition, in terms of public statements Fragiadakis reiterated his unwillingness to resign and repeated a call for a compromise in cooperation with the HFSF.
The Bank of Greece (BoG), in an equally conciliatory tone, called for an immediate compromise in order to avoid any repercussions on the bank and the entire crisis-battered Greek banking system. Top BoG officials said a resurgent “blame game” merely hurts the financial sector’s stability.
What emerged over the last few days is a consensus between the leftist Greek government and the HFSF’s board that NBG’s current board of directors cannot ignore the decisions and recommendations of the bank’s primary shareholder, which is none other than HFSF.
The pressure on Fragiadakis to resign now appears explicit by the government side, which wants to avoid an impasse at a particularly sensitive period in negotiations with creditors. Otherwise, the prospect of HFSF, as the primary shareholder, “pulling the trigger” to table a no confidence motion for the entire NBG board is a reality.
On his part, NBG’s embattled CEO underlined that an overwhelming majority of NBG board members voted to appoint Takis Thompoulos as the group’s new chairman, in fact selecting him among two candidates that the Fund itself had initially approved.
According to NBG sources, the board applied the principles of corporate governance and boardroom autonomy to the letter, in line with revised legislation on Greek banks’ top management and administration.
