Greece, in a bid for housecleaning, has split one of its smaller lending institutions into 'good' and 'bad' parts. The bank is FBBank and its good parts would be absorbed by the National Bank of Greece, the country's largest lender.
The whole transaction was confirmed by the central bank last Saturday. FBBank was severely hit by rising bad debts as well as losses resulting from government bond write-downs. The move to address the situation is to consolidate banks as there is still lack of access to international funding markets.
Many banking sources have told Reuters that FBBank would be closed down as part of a widescale restructuring program for the banking sector as a result from the country's debt induced recession.
FBBank's majority owner is the Victor Restis family, the renowned Greek shipowner. It currently has 19 branches in Greece and would be taken over by National Bank by May 13. FBBank reported Eur1.6 billion or US$2.1 billion in assets last 2011.
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