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Little more than a year ago, Eurobank Ergasias symbolized all that was wrong with Greek banking. The lender had sought to secure its future through a merger with the larger National Bank of Greece, only to have the country’s bailout masters — the troika of the European Commission, the European Central Bank and the International Monetary Fund — block the deal on size grounds. Hemorrhaging red ink and unable to raise even a fraction of its massive capital needs from private investors, Eurobank was effectively nationalized through a €5.8 billion ($7.8 billion) infusion of money from the Greek government’s bank bailout fund.

Today the situation could hardly be more different. Eurobank has become a magnet for international investors eager to capitalize on the Greek turnaround story. The revival began when, in the wake of the bailout, the bank tapped a London-based investment banker, Christos Megalou, to become its chief executive. A former Credit Suisse banker, Megalou took an ax to costs, shedding 12 percent of the bank’s workforce through a voluntary retirement program. He gained scale by acquiring two smaller lenders, with the government bailout fund paying virtually all of the costs. Most important, Megalou used his investment banking Rolodex to reach out to global investors, including a group led by distressed-debt specialist Wilbur Ross Jr. that had scored big gains in Ireland’s banking revival and was looking to duplicate that success in Greece. In April the CEO raised €2.9 billion with a rights issue, making Eurobank the first big Greek lender to return to majority private ownership.

“We now have more flexibility than other banks to make strategic decisions,” Megalou says. He believes that continued cost-cutting and measures to reward more-productive employees will return the group to profitability next year. “It’s also important that clients perceive us as having a private sector mentality,” he adds.

Eurobank’s recovery is the most dramatic sign of a broad-based revival in Greek banking, one that is crucial to the country’s economic recovery. Greece’s other big banks — Alpha Bank, National Bank of Greece and Piraeus Bank — also have convinced some intrepid, mostly foreign, investors that a bank-led recovery is under way. Altogether the Big Four banks have raised €8.35 billion in equity and an additional €2.25 billion through bond offerings this year.