Galery

1

The Securities and Exchange Commission will investigate Alpha Bank and the National Bank of Greece trading of shares carried out between February 18 and 21 this year, announced the Athens News Agency. The news that spread on Friday, February 18, that the two banks intended to merge has seriously stirred up the market. Alpha Bank’s shares jumped by around 33% and those of the National Bank of Greece by 18%, and the first day after the announcement, Monday, Feb. 21, the trading of both banks shares was three times higher than usual.

The announcement of the two banks merger plans stirred the market for short and substantially increased the demand for their shares. As the chances Alpha Bank and the National Bank to become one company decreased all the enthusiasm dropped and the trading price of their shares too. Now the Securities and Exchange Commission will focus on the shares trading of the two banks, and how the disclosure of the merger plans have helped their more profitable trading on the stock exchange.
 
Despite all the different maneuvers, financial experts estimate that all plans for reform in the banking system in Greece will remain in the background for now until the summit of the European Union leaders. It has to find a final solution to the debt crisis of the countries of the European periphery. The adopted solution will define whether the Greek government bonds used as collateral by commercial banks to the European Central Bank will be haircut or the external debt will be rescheduled.

Banks will hold their plans for mergers while the situation with the external debt issues gets clear. All administrations of the largest Greek banks are on the alert and in close cooperation with foreign consultants working on various scenarios. Sources from the National Bank of Greece referred to by Imerisia claim that its management is ready to turn to foreign consultants to help it prepare an aggressive takeover offer to Alpha Bank, after the proposal for a friendly merger was not accepted.

At the same time, the signs of the supervisory Troika show that Greek banks have little time to reorganize. Although the economic crisis in Greece blocks local banks access to international capital markets, they should find alternative ways of funding and reduce their dependence on the European Central Bank. Greek banks are required to prepare two-year plans for funding which will come from various sources to ensure their liquidity and their survival.

The European Central Bank representatives have required Greek banks to reduce the size of the used state bond guarantees of 95 billion euros to 60 billion euros. The situation is getting even more serious taking into account that between one and 1.5 billion euros of deposits are being withdrawn each month from the Greek banking system. It is expected on this basis that there will be between 15-18 billion euros less in deposits in Greek banks by the end of 2011. Under these circumstances, the reform of banks into larger and more stable structures proves necessary so that the capital markets to be convinced of their profitability and to restore the normal course of funding.