The Greek government is likely set to sell its entire stake in Piraeus Bank next month, according to Reuters and Nasdaq.

Greece’s bank bailout fund, the Hellenic Financial Stability Fund (HFSF), was set up to recapitalise Greek banks during the country’s decade-long crisis from 2008-2018.

A 27 per cent stake sale in Piraeus Bank will be the latest in a series of similar divestments across Greece’s four biggest lenders – a reflection of the progress the banking sector has made since the financial crisis ended.

HFSF has injected around 50 billion euros into the banking sector and began reducing its holdings. It sold a 20 per cent stake in National Bank (NBG) and 9.4 per cent of Alpha Bank in November and a smaller stake in Eurobank in October.

Piraeus Bank’s market value is 4.9 billion euros, which means HFSF could seel its stake for more than 1 billion euros.

According to sources, it was initially thought that there would be a sale of 22 per cent, but strong interest from foreign investors sees that go up. They added that a majority would be offered to institutional investors and a smaller part to retail investors.

Last week, Piraeus said it expects profits to jump in the coming years, with its shares now up 20 per cent since the start of the year.

Based on the FTSE/Athex Banks index, Greece’s broader banking sector shares have gained about 16 per cent since the beginning of 2024 after a 67 per cent jump in 2023.

This is correlated to strong economic growth in the country and recent upgrades to the investment grade credit rating.

Bad loan ratios were cut below seven per cent by Greek lenders last year, from 45 per cent in 2016, with hope to distribute a dividend for the first time in 13 years.