Ex-Credit Suisse Banker Taps Crisis Lesson for Greek Rebound

Jul 15, 2014 4:07 am ET

(Updates with career details in 22nd paragraph.)

July 15 (Bloomberg) -- When Anastasia Sakellariou moved back to Greece in 2009 to get married, giving up international trips and pay checks that came with being a banker at Credit Suisse Group AG, Europe’s debt crisis had barely begun.

Five years on, the 40-year-old is at the heart of the country’s revival efforts. As head of the 50 billion-euro ($68 billion) Hellenic Financial Stability Fund, Sakellariou is among only a handful of women in high-profile jobs in Greece, and is charged with resuscitating banks hit by the biggest sovereign debt restructuring in history and the worst peacetime economic downturn.

As she works on weaning the lenders off government support and guiding them into private ownership, Sakellariou is drawing on more than a decade of banking experience in London and New York, where she says she learned crisis-management lessons that have served her well.

“I always wondered if I came back to Greece whether I would find something that would be challenging and interesting to do,” Sakellariou said in her first interview in the job in her downtown Athens office, over the growl of traffic from the city’s streets. “I found it.”

A measure of her success: Greece’s four main banks raised 8.3 billion euros from capital markets this year, part of the drive to revive a sector that must underpin a return to growth after a six-year recession that almost tipped Greece out of the euro area.

Investors including Fidelity, BlackRock Inc. and Paulson & Co. have poured in. Eurobank SA, the third-biggest bank unable to draw private investment last year, is now majority owned by private investors.

Global Perspective

“She was able to grasp that the international investment community would be interested in the Greek equity story more than local investors,” said Christos Megalou, the chief executive officer of Eurobank, who met Sakellariou when they both worked at Credit Suisse. “We were certain we could sell this story and she understood it.

The Athens Exchange Banks Index of the five publicly traded lenders has gained 37 percent in the past 12 months, outpacing the 13 percent gain for the 43 banks on the Bloomberg European banks and financial services index.

The top four banks now control 98 percent of deposits, making the Greek market one of the most concentrated in Europe, increasing the chances for profitability, Citigroup Inc. said in a July 4 report entitled ‘‘Herculean Recovery.’’

Sakellariou returned to Greece in the summer of 2009. Just months later, a new government revealed that the country’s budget deficit was four times the European Union limit, sparking a debt crisis that put it at the epicentre of the turmoil that ensnarled Ireland, Portugal and Cyprus and threatened Greece’s place in the euro region.

Euro Fears

Named the HFSF’s first CEO in Jan. 2013, Sakellariou’s priority was to shepherd a recapitalization exercise to repair the damage wrought by a 2012 sovereign debt swap to Greek banks, already shut out of markets and wilting under mounting delinquent loans.

That would be the first test of private-sector appetite for the banks since the swap left them with 38 billion euros in losses. It would also ‘‘keep the management from falling into the embrace of the state, which has a very poor track record in managing banks,” said Alex Boulougouris, the Prague-based head of Greek Research at Wood & Co. Financial Services AS.

Set up in 2010 to ensure the stability of the banking system in concert with the central bank, the Bank of Greece, the HFSF was endowed with 50 billion euros after Greece sliced half off its 200 billion euros of privately-held sovereign debt.

Money Trucks

Back-to-back elections in May and June 2012 fanned fears Greece would leave the euro, with 15 billion euros in deposits fleeing the country’s banks in those two months, central bank data showed.

As the Bank of Greece sent trucks around the country to keep banks supplied with cash, the HFSF pumped 18 billion euros in bridge capital to the four biggest banks to bring their capital ratios to 8 percent.

As calm returned, in a two-step process, three of the main banks raised 10 percent of their capital from private sources in May and June 2013. Eurobank, whose merger with National Bank of Greece SA had been nixed, was taken over by the HFSF, which named a new management team led by Megalou.

The four banks dived back into capital markets this year as euro exit fears receded and Prime Minister Antonis Samaras produced a budget surplus before interest payments, paving the way for Greece to sell its first bond in four years.

Studying Abroad

“The challenge and the mission is the return to normalcy of the entire banking sector,” said Sakellariou. “Elsewhere we had one bank, or two banks, but here we’re talking about the entire banking sector.”

Sakellariou’s office -- with drawings on the wall by her four-year-old daughter -- is dominated by a floor-to-ceiling poster of London’s Piccadilly tube station, which reminds her, she says, of the energy and vibe of London.

She always planned to study abroad, she said, ever since she went to a summer school in England when she was 14 and fell in love with the country.

After attending the private Arsakeio Tositsea school in Athens, she studied at Warwick and Reading universities in the U.K. before clinching her first job as an investment banker with Deutsche Bank AG in London. Stints on Wall Street followed where she worked at Salomon Bros. before returning to London to work at Credit Suisse in 2000.

‘Difficult Moments’

She rose from vice president to be a managing director in the Global Markets Solutions Group covering Europe, the Middle East and Africa, working with clients in credit restructurings. It’s there, Sakellariou says, she learned about crisis management that would help her in Greece.

“When you’ve worked in the City for a long time you know there are always crises, there are always difficult moments and you have been trained to find solutions,” she said. “When you recapitalize four banks at more or less the same time you can imagine that there have been many difficult moments.”

She “had to make judgment calls in all sorts of markets, emerging, western and for different industry sectors, which gave her a huge amount of perspective,” said Marisa Drew, who is global co-chief of the unit at which Sakellariou worked.

Upon her return to Greece, Sakellariou first worked as an adviser to Piraeus Bank SA Chairman Michael Sallas and then as chief risk officer at Hellenic Postbank SA before applying for the HFSF job.

Rare Woman

Although she was among 25 Hellenic Postbank officials in an indictment following an inquiry into its lending practices between 2007 and 2012, she has said nothing on the matter. Yannis Stournaras, the former finance minister who appointed her to the HFSF and is now governor at the Bank of Greece, said he had “full confidence in Ms. Sakellariou, in her ethics, professional competence and the work she has done until now.”

Sakellariou is among very few women in top jobs in Greece.

The share of women on the boards of the largest traded companies in Greece was 8 percent at Oct. 2013, compared with the average of 18 percent in the European Union’s 28 members, according to the European Commission. Female lawmakers are just 21 percent of the Greek legislature, compared with an average across the EU of 28 percent, according to the Commission.

Samaras has appointed one woman to his cabinet as a senior minister and 18 men, among the worst ratios in the EU, according to the Commission. In contrast, Italian Prime Minister Matteo Renzi’s Cabinet has eight women for the nine men.

‘Achilles Heel’

In the HFSF’s annual report on June 12, Sakellariou said the potential recovery value of its funds was now 34 billion euros, more than double an initial estimate of 16 billion euros in March 2012 by the International Monetary Fund, one of Greece’s three bailout overseers.

That still depends on banks tackling “a mountain of bad loans”, according to an IMF June report. Greece has one of the highest non-performing loan levels globally, at 40 percent of total loans at the end of last year, the “Achilles heel” of Greek banks, the IMF said.

The next hurdle will be the asset quality review by the European Central Bank and stress test by the European Banking Association in October. That may entail the use of the 11 billion euros left in the HFSF’s funds.

“She’s been important in this phase of the restructuring of the banking sector, bringing an international perspective and knowledge to the table,” said Eurobank’s Megalou. “There were plenty of good bankers around but you needed someone who knew more than just Greek banks.”