ECONOMY

Piraeus adds three Cypriot networks

Piraeus Bank officially announced on Tuesday the absorption of the Greek branches of all three Cypriot banks active in this country, adding that they are finally reopening on Wednesday after a last-minute glitch prevented them from doing so on Tuesday. The banks had remained closed for 11 days.

The transfer deal for the Greek branches of Bank of Cyprus, Cyprus Popular Bank (also known as Laiki) and Hellenic Bank was signed on Wednesday in Nicosia after four days of protracted negotiations that ended with Piraeus agreeing to pay 524 million euros to the Cypriot lenders. The agreement also includes the absorption of Investment Bank of Greece (IBG), a Laiki subsidiary.

The signing of the deal officially puts an end to the worries of thousands of people in Greece with deposits at the three banks’ local branches who had feared a similar fate to depositors in Cyprus. Piraeus officials told Kathimerini that the acquisition of the three networks by a Greek lender was a condition set by the Eurogroup for the Cypriot bailout. They underscored the contribution of the Finance Ministry and the Bank of Greece in the deal.

Besides making Piraeus the second-biggest banking group in the country after National Bank, the agreement will also improve the lender’s mix of loans as it is estimated to have acquired a better portfolio compared to its existing one.

The branches will offer clients the full range of bank activities and Piraeus Group officials stress there will be absolutely no limit on cash withdrawals, as is the case in Cyprus.

Meanwhile, Bank of Cyprus rejected the resignation of chairman Andreas Artemi on Tuesday following the appointment of an administrator to downsize the island’s biggest lender as a condition for an international bailout.

Artemi tendered his resignation earlier in the day along with four other board members, complaining that the government had failed to inform them in advance of the appointment of an administrator to oversee the bank’s restructuring. He was also not happy with the process for the absorption by Piraeus Bank of BoC’s branches in Greece.

The resignations will only apply if they are not withdrawn within a week.