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Eurobank’s board members go to the National Bank of Greece

11 March 2013 / 18:03:16  GRReporter
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The new management of the National Bank of Greece will take in its management part of the Eurobank’s management staff as the merger between the two institutions is expected to be completed in the early summer. According to the latest information, the current general manager Nikos Nanopoulos and the deputy general manager Viron Ballis will remain in the management body of the new banking system.

The other deputy general manager of Eurobank-Greece, Nikos Karamouzis, is expected to remain outside of the new bank. GRReporter’s sources comment that the head of the National Bank of Greece Alexandros Tourkoulias offered the post of "sub-governor" of the National Bank of Greece to members of various boards of local and foreign banks operating in the Greek market. None of them accepted the position because the expectations are that the new merged bank will not be able to meet the supervisors’ requirements of capital adequacy and will likely be temporarily nationalized. The high percentage of unredeemable debts and the losses following the haircut of the face value of Greek bonds are putting the bank in a disadvantageous position.

Meanwhile, the National Bank of Greece has announced the convening of a steering committee for the merger, which will define the new structure of the financial institution. Its chairman is the current head of the National Bank of Greece Alexandros Tourkoulias. The committee will be responsible for achieving the merger targets and for the establishment of the new biggest commercial bank in the country. It will ensure the integration between the two institutions and will take key decisions about the completion of the process. McKinsey & Co, which operates in the field of strategic planning and integration of internal operations, The Boston Consulting Group (BCG), operating in the field of strategic planning and integration of international operations and Accenture, which is responsible for the integration of information systems will be the consultants of the merger between the National Bank of Greece and Euronbank.

The committee will involve representatives of the Hellenic Financial Stability Fund, which will allocate 90% of the funds to recapitalize the banking system in Greece. The supervisory mission of the three lending institutions (the International Monetary Fund, the European Central Bank and the European Commission) has appointed Paul Koster manager of the Hellenic Financial Stability Fund. He is based in Dubai, because along with the Greek Fund, he manages the Dubai Financial Services Authority and the Commission on Securities and Stock Exchange of the emirate. Koster has significant experience in the financial field and is a former member of the Dutch financial supervising authority. He held key positions in the stock exchange in Amsterdam and in the Arthur Andersen company for financial supervision. To Vima newspaper reports that Koster is known as "The Flying Dutchman" in banking circles due to his frequent flights from and to Dubai and Athens.

Under his contract with the supervisory Troika, the head of the Hellenic Financial Stability Fund should come to Athens twice a month. The appointment of the Dutch financier has scandalized the Greek banking circles. The main question asked by local experts is how Koster could effectively manage the fund with assets worth 50 billion euro from Dubai. The amount is crucial for the recovery of the local banking system and is almost 30% of Greece’s GDP. At the same time, a manager who is focused more on other issues (the financial condition of the Emirate of Dubai) will manage it. Local bankers disapprove the lenders’ approach. They have fired the former head of the Fund Takis Tomopoulos, who was the manager of the National Bank of Greece for many years, in order to replace him with "The Flying Dutchman."

Banks in Greece will have to complete the recapitalization by 30 April 2013 but the merger of the National Bank of Greece and Eurobank will not be completed within this time frame. This is another reason due for which the new financial institution will need state support and for its nationalization. According to Greek media, the government has pledged to sell all the banks that were nationalized during the support programme by an international tender. If this is true, the National Bank of Greece will go in foreign hands, because no local financial institution will have the funds to buy back the National Bank of Greece from the state. The expectations are that Alpha Bank and Piraeus will be able to meet the supervisors’ requirements of capital adequacy and will remain private.


Tags: EconomyCompaniesNational Bank of GreeceEurobank
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