ECONOMY

Piraeus Bank eyes synergies worth millions

Piraeus Bank announced on Monday that the acquisition of the sound operations of Agricultural Bank of Greece (ATEbank) will cost it 95 million euros and create millions of euros worth of synergies, in response to resistance by ATEbank employees and left-wing political parties.

Piraeus, which will absorb the sum of ATEbank deposits and its healthy loan portfolio, has the former state bank under its umbrella as of yesterday, although ATEbank will retain its brand name and branch network.

The statement by Piraeus suggested that the synergies created from the absorption of ATEbank are estimated a 155 million euros after tax by 2015 and at 155 million each year thereafter. Synergies will emerge from the drastic cut of administrative expenses, the reduction of deposits cost and the optimum use of the branch network.

Piraeus is acquiring healthy loans of 10.6 billion euros, Greek state bonds and treasury bills of 1 billion euros, various other assets worth 3 billion euros, as well as ATEbank?s holdings in Agrotiki Insurance, ATEbank Romania, ATebank Serbia, First Business Bank and ATE stockbrockerage. Deposits amount to 14.3 billion euros and obligations to the European Central Bank — from liquidity drawn — to 6.3 billion euros.

While the two banks will have a common management, they will retain their separate networks in order to retain the comparative advantages they have, while all jobs at ATEbank will be maintained, which Piraeus insisted was its priority.

ATEbank workers began yesterday rolling 24-hour strikes to oppose the lender?s sale, while the head of main opposition party, SYRIZA, Alexis Tsipras, branded ATEbank?s absorption by Piraeus a ?scandal.? He said his party does not recognizing the move and will reverse it.

The issue will be discussed on Friday in an extraordinary meeting of Parliament?s Finance Committee, in the presence of Finance Minister Yannis Stournaras and Bank of Greece Governor Giorgos Provopoulos, after a request by government coalition partners PASOK and Democratic Left.