Greece's Piraeus Bank sealed a deal for the purchase of Greek private lender Geniki Bank from French banking group Societe Generale, it was announced in Athens on Friday.

Piraeus' acquisition of 99.1 percent of shares in Geniki -- controlled by Societe Generale since 2004 -- is a significant step in consolidating Greece's ailing banking sector, according to local analysts.

"Piraeus Bank continues to play a decisive role in the reconstruction of the Greek banking system. The purchase of Geniki Bank will further boost our capital base and funding sources and strengthen our position in the upcoming recapitalization," the lender's head Michalis Sallas said in a press release.

Piraeus in July launched the consolidation process amind a banking sector under immense pressure due to the Greek sovereign debt crisis. It first purchased the healthy assets of the ailing state-run Agricultural Bank of Greece (ATEBank).

Following the absorption of Geniki and ATEbank, Piraeus Group -- the fourth largest lender in Greece -- will have total assets of some 77 billion euros (100 billion U.S. dollars) and a network of 1,328 branches with more than 18,000 employees nationwide and across nine other countries.

Earlier this month, Alpha Bank signed an agreement for the acquisition of Emporiki Bank from French Credit Agricole to create a lender with assets of more than 70 billion euros.

In addition, National Bank and Eurobank, the country's top two biggest lenders, opened talks to merge into a new entity which will have combined assets of more than 177 billion euros and more than 1,800 branches with over 50,000 employees in Greece and other southeastern European countries.

The Greek government and international lenders who keep the debt-crippled country afloat with multi-billion rescue loans since 2010, have encouraged the restructuring of the Greek banking market as part of efforts to avoid a chaotic default and exit from the eurozone.

Greek banks have suffered major losses after a voluntary haircut of Greek debt earlier this year and the withdrawal of some 90 billion euros by the public fearing a collapse of the Greek economy.

In May, Greece's four largest lenders received an 18-billion-euro boost in capital under bailout deals. Further such action is expected in the coming months. (1 euro = 1.31 U.S. dollars) Endi

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