Alpha Bank and Eurobank announced on Saturday the signing of an agreement for the transfer of Alpha’s subsidiary in Bulgaria to Eurobank Bulgaria AD (Postbank).
The transaction concerns all of Alpha’s activity in the neighboring country, which on September 30 had total assets of 464 million euros, deposits of 261 million, a loan portfolio (after provisions) of 307 million euros and a network of 82 branches.
The transaction forms part of the two lenders’ restructuring plans as approved in 2014 by the European Commission. For Alpha the transaction is capital neutral and is part of its plan for exiting non-essential markets in the group’s activity.
With the acquisition of the Alpha subsidiary in Bulgaria, Postbank is strengthening its position in the country, and expanding its client base in retail and corporate banking. Once the transaction is completed, it will become Bulgaria’s fourth biggest bank in deposits and loans.
Postbank stands to benefit from considerable synergies from the second year on while retaining its high capital adequacy index and its significant cash stock. On a group level, the transaction will marginally strengthen the capital position of Eurobank.
The subsidiary’s transfer is expected to take place in the first quarter of 2016, pending the necessary regulatory approvals.