ECONOMY

Fitch warns of short-term risks for Greece’s Piraeus Bank

Piraeus Bank’s acquisition of the Greek operations of three Cypriot banks raises short-term risks despite longer-term benefits from a stronger domestic franchise, Fitch Ratings said on Wednesday in London.

This deal increases execution risks as Piraeus is already integrating two banks it acquired in the second half of 2012, ATEbank and Geniki, it added.

“The group also needs to undergo significant restructuring and rationalization of excess capacity under the Greek banks’ recapitalization process. Undertaking both strategies at the same time is likely to require substantial management effort and raises operational risks exacerbated by Greece’s weak economy. But Piraeus benefits from previous experience in bank integrations, albeit on a smaller scale,” the Fitch statement read.