ECONOMY

Alpha and Eurobank agree to merge

Two of Greece?s three biggest lenders, Eurobank EFG and Alpha Bank have reached an agreement to merge, according to reports, which would create one of the biggest banking groups in the broader region.

Skai radio reported on Saturday that the second and third Greek banks in terms of assets and capitalization have now struck a deal that will be announced formally in the next few days.

The new bank to be created will also have the participation of investment funds from Qatar.

“The deal is about a friendly merger between Alpha Bank and Eurobank, with the participation to a significant extent of the Qatar Investment Authority,» a senior banker at Alpha Bank told Reuters.

“The deal will form an entity that will be among the 25 biggest in Europe,» said the banker, who declined to be named.

The banker, and another banking source involved the deal, said that the two banks will have board meetings on Monday, which will be followed by announcements and a press conference.

“EFG Eurobank and Alpha Bank are close to a merger deal,» the second banking source said.

The government has actively encouraged consolidation in the Greek bank sector given the general financial crisis and the strong need for a robust credit system with a strong capital basis that will support the market and implement the Greek bond rollover.

The news also comes as the Greek banks? loan portfolios are under inspection by BlackRock, following a demand by the Bank of Greece.

Sources told Kathimerini that the new bank?s governing board will have five members from Eurobank and five from Alpha, and will be chaired by Alpha president Yiannis Costopoulos. The board will also have two chief executive officers.