Top Greek banks in merger move

THE second- and third-largest banks in Greece yesterday announced merger plans following government calls for lenders to pool resources to help deal with the country’s debt crisis

In a statement, Eurobank EFG and Alpha Bank said their tie-up would “play a vital role in the economic recovery of Greece”.

The new bank will be the biggest in south-eastern Europe, with assets of €146 billion (£129bn) and 1,300 branches.

George Provopoulos, governor of the Bank of Greece, described the deal as key to supporting the country’s battered banking system.

“The creation of a big and strong bank is the first pivotal step in changing the Greek banking map. This kind of strategic move helps boost the banking system’s competitiveness and financial stability significantly,” he said.

The banks estimate that the merger will generate around €650m of synergy savings a year. The Qatar Investment Authority (QIA), which owns 5 per cent of Alpha, is expected to take a stake of 15 per cent of the combined bank as part of the merger deal.

Eurobank has recently sold its Polish subsidiary and promised to raise its capital further after failing EU-wide bank stress tests. Alpha Bank rejected a merger offer from the country’s biggest lender, National Bank, in February.

The merger news came as the Greek government prepared for talks with the European Union and the International Monetary Fund this week about the second bail-out.