Piraeus Bank absorbs Cypriot branches

Piraeus Group has won the race to secure the absorption of the Greek branches of Bank of Cyprus and Cyprus Popular Bank, following Friday’s decision by the Hellenic Financial Stability Fund (HFSF), thereby safeguarding deposits in both lenders in Greece. Hellenic Bank, Cyprus’s third-biggest lender, will continue to operate autonomously.

As a result, after remaining closed for more than a week, the branches of the two Cypriot banks will reopen on Tuesday having joined the Piraeus Bank Group, whose officials are set to travel to Cyprus on Saturday to sign the deal.

Piraeus sources told Kathimerini that once the agreement is signed and all institutional authorities have given their approval, the branches will reopen on Tuesday. The Finance Ministry, the Bank of Greece and the HFSF expressed certainty the branches will open as planned and continue their operations smoothly.

With this acquisition, Piraeus Bank adds a loan portfolio of 19.5 billion euros and deposits of 12.5 billion, a network of 289 branches and some 5,100 new employees. This makes Piraeus the second-largest pillar in Greece’s credit system, ahead of Alpha, with assets exceeding 100 billion euros, a loan portfolio of 70 billion and deposits of 52 billion euros. The group will employ some 24,000 people and its network will exceed 1,700 branches, having also absorbed Geniki Bank and the healthy side of ATEbank as well as agreeing to acquire the Greek subsidiary of Portugal’s Millennium Group.

Piraeus has acquired the branches of the Cypriot lenders for the symbolic price of one euro. Before their transfer to Piraeus, the local arms of BoC and CPB will be recapitalized to the tune of 1.5 billion euros, with 950 million coming from the HFSF and 550 million from the Cypriot government.

The acquisition follows a week of procedures and a long meeting at the prime minister’s residence on Thursday with the participation of all three coalition government partners: Antonis Samaras, Evangelos Venizelos and Fotis Kouvelis. Faced with the prospect of a bank run in Greece from Tuesday that would have shaken the local credit sector, the three leaders, along with Finance Minister Yannis Stournaras, agreed to raise Greece’s contribution from 750 million, after the Eurogroup made it clear the move would not burden the country’s debt.

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