Standard Chartered interested in Piraeus Bank's Egypt unit

Deal would boost Greek bank as it seeks insure itself about the downturn in debt-laden Greece, but there is no certainty on an agreement

Standard Chartered is considering buying Piraeus Bank's Egyptian subsidiary, a deal that would boost the Greek bank as it seeks to strengthen its balance sheet in light of the downturn facing debt-laden Greece.
"The due diligence will start in the coming days. There will be a relative strengthening of Core Tier 1, which was at 10.8 per cent at the end of March," a Piraeus Bank official said on Friday.
Greek banks, hit by the country's sovereign debt crisis, have been looking for ways to boost their capital base to cope with a protracted recession at home that has led to a rise in non-performing loans.
Piraeus Bank Egypt had equity capital of 103 million euros, a 737 million euros loan book, assets totalling 1.38 billion euros and 48 branches at the end of March. Standard Chartered said it did not expect a material financial impact in any deal.
The discussions between the parties are also focused on a wider strategic relationship in the areas of trade finance, payments and project finance, Piraeus Bank said.
Piraeus Nank said in a statement that a request had been submitted to the Central Bank of Egypt so that due diligence could commence, but that there was no certainty as to whether any agreement would be reached.
Piraeus Bank shares were flat at 0.88 euros at 0922 GMT, in line with the Greek banking index . Standard Chartered shares were up 0.8 percent at 1,619 pence, outperforming a FLAT FTSE 100 index (.FTSE) in London.
On Thursday, Greece's second-largest lender EFG Eurobanksaid it was in initial talks to sell a majority stake in its Turkish unit Eurobank Tekfen as it seeks to safeguard its capital base against debt loses.