ECONOMY

Emporiki sale to spur credit sector concentration

The radical restructuring of the local credit sector is picking up speed after the preliminary agreement between Credit Agricole and Alpha Bank for the sale of the French group?s local subsidiary, Emporiki, to the Greek lender. The deal paves the way for the other two major local players — National Bank of Greece and Eurobank Ergasias — to increase their own presence in the market and boost their capital base. For its part, the Piraeus group is ready to announce its next step: the acquisition of Geniki Bank from Societe Generale.

There are great expectations regarding the reorganization of the credit sector and rumors, as always, are traveling very fast. Even before the formal announcement of the Credit Agricole-Alpha deal on Monday, there was talk of the National and Eurobank discussing a possible merger. Although this eventuality cannot be ruled out, it is considered extremely premature, while officials from both lenders have told Kathimerini that the rumors are unfounded.

It is certain that the restructuring of the credit industry can only take place via large-scale concentration, with bank officials suggesting that by next summer the sector and the balance of power within it will be radically different.

There has been no comment from National Bank regarding Alpha?s selection by Credit Agricole for the sale of Emporiki, which National and Eurobank missed out on. After all, even after Alpha?s acquisition of Emporiki, National remains the biggest player in the Greek market with total assets in excess of 100 billion euros. Its management is looking to make substantial moves that would enhance the group?s capital base and, as National officials have told Kathimerini, the bank still has a great range of options. They added that National can save millions of euros in funds through internal restructuring moves and other changes, thereby drastically cutting its capital needs in the context of recapitalization.

The management at Eurobank is also examining its alternatives for boosting its group?s capital base through well-planned mergers and optimal use of its holdings. Group officials have told Kathimerini that there is only one way ahead for Greek banking, and that is through mergers and the creation of fewer and bigger groups in the sector. They added that several such opportunities are expected to arise shortly in the local market and that the group?s main priority is making moves that lead to the bolstering of its capital base.

Analysts note that, following its recapitalization, state-owned Hellenic Postbank will become the sector?s focus of interest, while other small lenders such as Millennium and the Cypriot banks — Bank of Cyprus, Cyprus Popular Bank and Hellenic Bank — could attract interest with a view to a merger.

As far as the Piraeus group is concerned, it has already taken a significant step toward strengthening its capital base through the recent acquisition of the healthy part of ATEbank. The group currently has assets of 74 billion euros, while its portfolio amounts to 44 billion.

Furthermore, Piraeus?s announcement of an agreement to purchase French group Societe Generale?s local subsidiary Geniki Bank is reportedly just a matter of days away, with the Greek lender paying no more than a symbolic price in the deal.