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Alpha Eurobank fired Greece with enthusiasm

30 August 2011 / 17:08:50  GRReporter
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Enthusiasm fired the Greek media after the official announcement of the merger of the year, which forms the largest bank in the country, Alpha Eurobank. The Greek Ethnos came with the title "A top bank is born." Imerisia focused on the size and stated, "Alpha Eurobank: the largest bank in Greece" and Naftemboriki reads, "Alpha Bank and Eurobank formed the first hyper-group." Vima stressed the importance of the new institution for the region with the headline "A strong presence of the new bank in the Balkans" and Elevtrotipia expressed most Greeks’ hopes by saying, “Happy augury for the super-bank from the new year ". These are the first echoes of the public after yesterday's press conference of the new financial organization the formation of which is expected to set the pattern for other changes in the local economy.

There are rumours already about the next merger in the banking sector, which involves the names of the National Bank of Greece and Piraeus Bank. Crucial role in the restructuring of the banks in the country plays not only the exchange of old bonds for new ones with longer maturity and lower interest rates (rollover), but BlackRock’s assessment of the state of local banks. Until now, Greece was the realm of small banks, which in the new reality of shortage of financing and economic instability, could become the first major victims of the crisis. Therefore, experts estimate that these banks must quickly find a roof to shelter them. On the other hand, the strong men of the National Bank of Greece the Chairman Vassilis Rapanos and the CEO Apostolos Tamvakakis will not allow the institution they represent to remain the second largest in the country.

The experience of Eurobank and Alpha Bank showed that the process of merger is not an easy task, since the two institutions began the relevant negotiations in the summer of 2010. Financial stagnation, however, accelerated the process and many analysts predict that this time Piraeus and the National Bank of Greece will get married in the near future. A Greek bank is almost impossible to fail, stress local financial analysts, because in the worst case, the financial institutions could rely on the Financial Stability Facility. It avails € 30 billion provided exclusively for Greek banks. For now, however, they are trying not to use this option because the state will become a shareholder in the company if taking the financial aid.

For this reason, the players in the sector prefer the merger of institutions, the costs cuts of banks and the sale of certain assets of the foreign companies as measures against the financial collapse.

The government position on the state presence in the banking sector remains firms for now. Therefore, it is expected in the future Agricultural Bank (ΑΤΕbank), Post Bank, the State Mutual Credit Fund and Attica Bank to join. Currently, there is no specific information about these actions, but there are not many options for the small financial institutions. "Until the announcement of the official statements and all the details of the new formations, the union of employees in the banking sector is following the developments and it is ready to respond in a way that will benefit the Greek public, the officials and the economy," said in a statement the union of bank employees. The restructuring of the financial sector worries the banking union because the mergers will inevitably lead to duplication of posts. However, the unions still refrain from loud promises of active strikes.

The merger of the largest companies on the Greek market continues in the telecommunications sector with the negotiations between two of the biggest companies in mobile communications in Greece - Wind and Vodafone. "Vodafone Group confirms that negotiations are being held with Largo Limited for a possible expansion of the business relations between Vodafone Greece and Wind-Greece," says the official message of the company to the media. It emphasizes that negotiations are at an early stage and there is no guarantees that it will lead to a merger. An eventual merger would seriously threaten the competitiveness in the sector, as only two major companies will remain on the telecommunications marke t- the new company and its only competitor Cosmote. The road to the merger of Wind and Vodafone is expected to be long, especially given that even the companies agree, the Competition Commission will have to examine the case.

Tags: EconomyCompaniesAlpha EurobankMergersFinanceTelecommunicationsVodafoneWind
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