Piraeus Bank will absorb the sound part of the Agricultural Bank of Greece in a restructuring of Greece?s banking industry demanded by international creditors.
Piraeus was chosen after an examination of the interest from local and international banks, the Bank of Greece said in an e-mailed statement. The offer has been approved by the Hellenic Financial Stability Fund and will mean ?the deposits of all customers are secured in their entirety and the smooth continuation of business is ensured.?
The part of Agricultural Bank to be absorbed by Piraeus comprises ?mainly the performing loans and securities portfolio, as well as the full amount of all the bank?s deposits,? the Bank of Greece said. The difference in the transferred assets and the liabilities will be covered by the HFSF, according to the statement. Financial terms weren?t provided.
Greece has been told to overhaul its banking industry after lenders sustained losses on their holdings of Greek government bonds in the country?s debt swap, the biggest sovereign restructuring in history. The country obtained a 130 billion- euro ($161 billion) bailout from the European Union and International Monetary Fund in March, which earmarked 50 billion euros for recapitalizing the banks.
Piraeus Bank said it will ?ensure all job positions? at Agricultural Bank, according to a separate e-mailed statement. Starting July 30, Agricultural Bank?s branch network will become part of Piraeus. The combined entity will have 75 billion euros of assets, 35 billion euros of customer deposits and 47 billion euros of loans. Agricultural Bank?s network will retain the ?ATEbank? brand, Piraeus said.
Agricultural Bank?s license has been revoked and a ?special legal provision? will be made for its non-performing loans that will not be transferred to Piraeus, according to the central bank?s statement. Units not moved to Piraeus will be taken on by the state.
The HFSF said in a statement that BNP Paribas SA (BNP) and Moelis