The government and the Bank of Greece are continuing to support the merger between National Bank and Eurobank Ergasias despite the disapproval of the country’s international creditors.
Finance Minister Yannis Stournaras is preparing to face the objections of the representatives of the European Central Bank, the European Commission and the International Monetary Fund – known as the troika – in talks later this week, with government sources stressing the merger has already gone too far to stop now.
On NET TV late on Monday, Bank of Greece Governor Giorgos Provopoulos confirmed the troika’s resistance to the creation of a Greek mega-bank. He reiterated that “the merger cannot and should not be reversed,” adding that “no more time should be wasted.”
Provopoulos also said that the country’s four systemic banks – National, Eurobank, Alpha, and Piraeus – would be given an extension of up to a month for the recapitalization program, as the timetable that provides for the completion of the process by mid-April “is unrealistic.”
The troika is reportedly linking its approval to the lenders’ ability to cover the 10 percent portion of participation by private investors in the share capital increase in order for banks to retain their private character. The Bank of Greece has sent letters to National, Alpha and Piraeus asking them whether they will be able to achieve this. It expects their responses by April 15.
National and Eurobank sources insist that the merger is going ahead as planned, pointing to the completion of the legal process by the end of May or early June, with the likelihood of the two banks holding general meetings after that. The plan provides for the completion of the merger by June 10 and of the recapitalization by June 20.
Alpha Bank also announced on Tuesday its capital strengthening plan, amounting to 4.57 billion euros. This will be put up for approval at an extraordinary general meeting scheduled for Saturday, with the aim of completion by April 16 at the latest. The plan provides for the potential participation of private investors up to 550 million euros, raising their ceiling of contribution to 12 percent.