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The merger of Alpha Bank and Eurobank EFG is postponed

30 January 2012 / 17:01:09  GRReporter
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The two major Greek private banks Alpha Bank and Eurobank EFG will not merge before the end of the Private Sector Involvement procedure. The official release of Alpha Bank reads that there are no clear deadlines for completing the transaction and it will be finalized after the completion of the Greek debt haircut. The same bank also states that when there are new messages, they will be announced to the investor community.
    Alpha Bank decision is surprising, because only a week ago on 23 January, the Competition Commission gave permission for the merger.

    Shortly after the release of Alpha Bank a special release appeared by Eurobank EFG. It, however, presents a different picture. "Eurobank EFG states it is in talks with Alpha Bank to complete the procedure for the merger of both institutions as soon as possible and believes that there is no reason to delay it."

    The Greek Ministry of Finance has also made a release, which recalled that it had supported the merger of the two banks from the outset as a step towards enhancing the competitiveness of the banking system in Greece. "The shareholder meetings of both banks were held on 15 November 2011 and approved their merger. This followed the decisions of the European Union of 26 and 27 October 2011, which defined the parameters of the Greek PSI," stated the Ministry of Finance. The Ministry argues that the two banks are closely monitoring the negotiations between the government and the private sector bondholders, and there is no significant change in them, which could explain the decision to postpone the merger.

    The Athens Stock Exchange and the commission on securities have immediately suspended the trading of the shares of both banks and ordered a revision of their transactions for the last seven sessions at least. The news soon became the headline in the Greek media.

   For some time, a rumour was floating around in the banking sector that the long-awaited merger that would form the largest private bank in Greece could fail. It was explained by the extremely difficult conditions under which the Greek banking system is operating at present. More precisely, after the verification of the credit portfolios of the banks by Black Rock Solutions and after the proposed solution for their recapitalization by issuing special shares, their merger is not necessary. In other words, the two banks are no longer threatened with nationalization.

Tags: Alpha BankEurobank EFGPSIMerger delaySharesAthens Stock ExchangeGreek banks
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