ECONOMY

Alpha deal for Emporiki is inked

The absorption of Emporiki Bank by Alpha, sealed by an agreement signed late on Tuesday, will create the country?s second-biggest lender with assets of just under 78 billion euros. According to its chairman, Yiannis Costopoulos, Alpha is now looking forward to a return to growth and profit.

Credit Agricole, the largest retail banking group in France, confirmed in a statement on Wednesday morning that it is selling its Greek subsidiary to Alpha and leaving Greece after its group results suffered as a result of the involvement.

?With the acquisition of Emporiki, a significant step is being taken toward rationalizing the country?s credit sector. Merging the two banks, each of which has a history of more than 100 years, is based on the common roots and values of their long history and on the special financial features of the deal,? Costopoulos stated in a letter to the staff of the Alpha group.

He added that ?the acquisition process is expected to be completed by the end of the year, following confirmation of all the necessary approvals.? Alpha officials said that the deal is now pending approval by the Bank of Greece, the Central Bank of Cyprus and the competition commissions.

Based on March data, Emporiki?s net position amounts to 3.4 billion euros, which will serve to boost Alpha?s capital base.

The share capital of the new bank will amount to 4.1 billion euros.

The incorporation of Emporiki will also bolster the quality of Alpha Bank?s loan portfolio as the new lender will have a total portfolio of 60.2 billion euros, for which there are provisions of 6.7 billion for 11 percent of all loans.

Synergies will come to 200 million euros, out of which 150 million concern operating cost synergies and 50 million funding and revenue synergies.

The funding line that Credit Agricole has secured for Emporiki, amounting to 1.4 billion euros, will be repaid in three installments, with the last one scheduled for the end of 2014.

The new lender will have deposits of 34.5 billion euros and total assets of 77.6 billion euros.