Ukraine’s Astra Bank goes from Alpha to Delta

Alpha Bank announced on Friday that it will be selling its Ukrainian subsidiary, JSC Astra Bank, to the Ukrainian group Delta Bank. The sale will amount to 82 million euros, with Alpha officials noting that the transaction will have no bearing on the group’s capital and is expected to be completed by the end of the year.

The sale of Astra forms part of Alpha’s strategic restructuring in the post-recapitalization period that all four of Greece’s systemic banks have entered. Greek and European authorities have until end-July to reach an agreement on the final business plans of lenders, though banking sources say a small extension may be granted until the fall.

Credit sector officials say that the business plans will have to include all new strategies and a specific timetable for the achievement of targets.

Business plans will include the sale of all non-banking activities (insurance companies, hotels, real estate, etc) as well as of banking activities in Southeast Europe. Regarding activities abroad, it is likely that banks will only make modest changes, such as that of Alpha, as they intend to retain the core of their subsidiaries in the broader region.

Along these lines, National Bank intends to sell up to 40 percent of its controlling stake in Turkish subsidiary Finansbank. However, sources in the group’s management stress that such a move can only be put into force in the long run, saying that no developments are expected anytime soon on this front.

With the sale of a 40 percent stake in Finansbank, the National group would strengthen its capital base while retaining a strong presence in the dynamic market of Turkey given that it currently owns more than 94 percent of Finansbank, one of Turkey’s biggest lenders.

In the local market, National is planning to actively utilize its properties as part of its effort to strengthen its capital base. Recent moves such as the buyout of hybrid titles, of shares, etc, have resulted in National’s core asset index rising to a 9.6 percent reading, with management intending to bring it up to over 10 percent soon. This will be achieved via the sale of non-banking assets such as the five-star hotel it owns in southern Attica (Astir Palace) and the use of its large real estate property portfolio.

The management of Alpha is also reviewing its position with an aim at strengthening its presence in strategic markets. In contrast, it is determined to pull out of secondary markets like Ukraine.

The strong capital base of the Alpha group, with a capital adequacy rate of 14.4 percent allows the bank’s management greater flexibility and more choices. After the successful share capital increase and the capital boost achieved through the acquisition of Emporiki Bank – which has strengthened the group’s capital by 2.5 billion euros – the core assets of Alpha amounted to 7.9 billion euros.

Piraeus Bank is also working on a restructuring plan and has already announced that it will be departing from the Egyptian market. It also intends to pull out of other secondary markets, along with selling subsidiaries, shutting down branches and utilizing the synergies from the recent absorption of six banking networks.

Finally, Eurobank has already departed from the Turkish and Polish markets and is now planning to reorganize its forces ahead of its privatization, which is being pushed by Greece’s lenders.

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