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June 28, 2022

Eurobank-Alpha Bank set to become Romania’s third largest bank group

Top Greek banks announced officially merger yesterday. The deal is poised to create the biggest bank in southeast Europe by assets.

Greece’s second and third-largest lenders, Eurobank and Alpha Bank, are to merge as banks in the recession-hit eurozone member come under pressure to consolidate. Under the terms of the agreement, Alpha Bank shareholders will hold 57.5 per cent of the merged lender and Eurobank shareholders 42.5 per cent, english.rfi.fr reports. The merger will create a bank with assets of EUR 150 bln , 80 bln in deposits and 2,000 branches in southeastern Europe. The freshly announced merger will propel their Romanian subsidiaries to the third position in the local system, from the lower half of the top 10 previously, according to a presentation of the Greek institutions, Mediafax informs.

Management control of the bank will be split. Current Alpha Chairman Yannis Costopoulos will become chairman of the merged bank, while the two banks’ current chief executives, De­metrios Mantzounis and Nicholas Nanopoulos, will remain as co-CEOs. The banks said they would proceed with a series of measures to boost capital at the combined entity. These include a EUR 1.25 bln rights issue, which is expected to take place early next year, and a EUR 500 bln convertible bond issue”, WSJ reports.

Meanwhile, Greece heads into a key EU-IMF evaluation of its ailing finances this week amid growing uncertainty over a crucial debt rollover, bickering among its European peers, and signs that its fragile recovery is beginning to stall. Senior representatives from the European Union, the International Monetary Fund and the European Central Bank will finalise a scheduled quarterly audit needed to unlock the latest portion of Greece’s first rescue loan agreed last year. The EU-IMF audit entering its final phase on Monday will determine whether Athens will receive next month a sixth tranche of funds under its original bailout, set in May 2010 at EUR 110 bln.

On the other hand, Greek bank stocks soared Monday on news of the tie-up, pushing the Athens bourse more than 10 pc higher. National bank of Greece SA shares were up 30 pc at EUR 3.60 in recent trade and Piraeus Bank SA was up 29 pc at EUR 0.72. The banks subindex added 20 pc and the general index was 10 pc higher. The deal, which involves Alpha Bank issuing five new shares for every seven Eurobank shares, foresees raising EUR 1.75 bln in fresh capital through a rights issue and a EUR 500 M convertible bond that will be taken up by the Qatar Investment Authority.

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