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Eurobank EFG and Alpha Bank merged

28 August 2011 / 12:08:31  GRReporter
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Two of the biggest Greek banks - the financial empire of Spiros Latsis Eurobank EFG and the created by Yannis Kostopoulos Alpha Bank merged under the pressure of liquidity crisis caused by the involvement of private creditors in the restructuring of the Greek public debt. The news will be officially announced tomorrow at 02:00 in the afternoon at a special press conference. The merger sweeps like a hurricane the structure of the Greek financial sector as we know it so far and for the first time in the history of the country takes the championship from the National Bank of Greece, as the most powerful local financial institution. 

The new bank mastodon will manage capital of around 150 billion euros, it will have investments of over 80 billion euros, it will serve more than 8 million customers and it will have over 2,000 branches. All this makes Eurobank EFG - Alpha Bank the largest bank in Southeast Europe and the 25th largest in the whole continent. News of the merger is leading in all Greek media that talk about a historical moment in the Greek economy. All financial analysts predicted that summer 2011 will be the season of bank mergers, for which insisted representatives of the supervisory Troika of the European Commission, European Central Bank and the International Monetary Fund and the Governor of the Bank of Greece George Provopoulos. 

Three events from recent weeks have made the merger of Greek banks inevitable. The decisions made at the Eurozone Summit on ​​ July 21 set banks as equal participants in the restructuring of the Greek debt. The 20 percent haircut literary devalued their shares, which collapsed on the Athens Stock Exchange, and the truth about their loan portfolios will be announced in coming weeks and months by experts of Black Rock Solutions. Second, Finance Minister Evangelos Venizelos stated unequivocally that any bank which seeks for help from the Fund for financial stability will receive it on behalf of its partial nationalization. And third, the deepening recession in 2011 and forecasts that it will continue in 2012 will further increase bank liquidity and the ability of institutions to attract capital. 

It is expected that president of Eurobank EFG - Alpha Bank will be Yiannis Kostopoulos, who has earned the image of one of the most discerning Greek financiers. His words that the Greek market has room only for two and a half banks became prophetic of today's local economy. The new Board of Directors will include five representatives of both banks and two executives who will most likely be the former executive director Nikos Nanopoulos and Dimitris Madzounis. The State of Qatar will will be part of the new bank formation with capitals. It is not yet clear what will be the role of Spiros Latsis be in it. But surely it will not be formal. 

This is not the first attempt for Eurobank EFG and Alpha Bank to merge their activities. Previous negotiations had failed at the last moment both due to objective and personal reasons. Obviously now the future of Greek banks is at stake and there is no room either for personal whims or corporate patriotism. 

Tags: Eurobank EFG Alpha Bank merger bank Greece economy debt crisis
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