Greece's National Bank, Eurobank open "constructive" talks for merger
- Alexia Vlachou
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E-mail Xinhua, October 6, 2012
ATHENS, Oct. 6 (Xinhua) -- Debt-crippled Greece's two top lenders, National Bank of Greece (NBG) and Eurobank Ergasias, have opened "constructive" talks to join forces and merge into a new entity.
"NBG's offer aims at the creation of a lender that will hold a key role as a pillar in the stabilization of the Greek financial system and will offer the necessary funding to assist in Greece's economic rebound," said NBG Chairman George Zannias, announcing NBG's bid for a friendly full takeover of Eurobank late Friday.
"Eurobank's board will assess the proposal in a constructive spirit, aiming at the benefit of all parts, including employees, customers, shareholders and Greek economy," Eurobank CEO Nikolaos Nanopoulos said Saturday.
If the merger is realized in coming months, the new bank will have combined assets of over 177 billion euros (231 billion U.S. dollars) and more than 1,800 branches with over 50,000 employees in Greece and other South Eastern European countries, such as Serbia, Bulgaria and neighbor Turkey.
Under the proposed deal which needs to be sealed by the boards of the two banks and the Financial Stability Fund, NBG will hold about 75 percent of the shares in the new entity.
The launch of talks between the two banks follows a round of attempts for consolidations in the Greek banking market which are encouraged by the government and international lenders who over the past two years have helped Greece to avoid default and a potential exit from the eurozone.
On Monday, Alpha Bank announced that it was in "exclusive" talks for the purchase of Greek Emporiki Bank from French Credit Agricole, while Piraeus Bank launched a bid recently to buy Geniki Bank from Societe Generale.
Analysts in Athens express optimism over the outcome of all these bids, noting that past attempts ended inconclusive. Last year, Alpha Bank and Eurobank announced a plan for their merger which failed after a few months.
Ever since, the Greek banking system has been under more pressure for recapitalization and restructuring, as the debt crisis persists.
The restructuring of the Greek banking sector was on the agenda of talks between Greek Finance Minister Yannis Stournaras and representatives of European Union/International Monetary Fund (EU/IMF) lenders in Athens on Saturday.
The Greek government and auditors have been negotiating over the past month a comprehensive deal on a new austerity and reform drive for the next two years demanded by creditors in return of further international aid to Greece.
Without a deal and a green light for new bailout loans during an upcoming EU summit on Oct. 18, Greece could go bankrupt by December. (1 euro = 1.30 U.S. dollars) Enditem
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