Alpha Bank?s merger rejection may be ploy to buy time

Alpha Bank?s rejection of a takeover offer from National Bank (NBG) may be a ?sit and wait? tactic in case there?s a sovereign-debt reorganization, said Italy?s Mediobanca.

?The likely restructuring of Greek sovereign debt would be favorable for Alpha Bank, allowing it to negotiate better deal terms,? Mediobanca wrote in a report, according to Bloomberg.

?A combination with Alpha Bank would become a good political excuse for NBG to deliver layoffs that would otherwise be socially unacceptable.?

National Bank?s investment in Greek government bonds is 260 percent of the bank?s tangible equity, twice the EU average, compared with 90 percent for Alpha Bank, Mediobanca said.

The Italian investment bank initiated coverage of Greece?s four biggest banks, saying recent capitalizations have given Greek banks a good cushion in the event of a debt reorganization.

National Bank and Alpha Bank were given a ?neutral? rating while Eurobank EFG and Piraeus Bank were rated ?underperform.?

Shares in Greek banks were up 2.26 percent in mid session trade on Wednesday, led by gains of 3.46 percent in Alpha Bank to 5.09 euros. NBG was up 2.20 percent to 6.97 euros while the broader market advanced 1.88 percent.

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