ECONOMY

Emporiki absorbs members

Emporiki Bank, Greece’s fourth largest, yesterday announced an extensive restructuring plan, involving the absorption of 10 subsidiaries, with a view to bolstering equity and realizing taxation and synergy benefits. Announcing the plan, Chief Executive Giorgos Provopoulos said the bank will absorb its closed-end Emporiki Investment fund, Emporiki Investment Bank, Emporiki Capital & Holdings and Emporiki Factoring subsidiaries. Emporiki Capital & Holdings comprises seven subsidiaries itself. The bank estimates equity capital will increase by 50 million euros, tax benefits will amount to about 4.5 million euros and other synergy savings to about 5 million. Further, it is anticipated that synergies will also boost revenues, particularly from cross sales of investment banking products to corporate clients, more efficient portfolio management and productivity gains. The bank is proposing a swap ratio of 7.807 shares of Emporiki Investment for each one of its own, which represents a premium gain of 7.7 percent for the shareholders of the fund on yesterday’s closing price. Announcing rather disappointing first-quarter results earlier this week, Provopoulos said putting the balance sheet back on a healthy footing was a key objective of the new business plan, which will involve a cut in expenses, withdrawal from unprofitable activities and a more efficient use of the extensive branch network in retail banking. Emporiki posted a first-quarter pretax profit fall after minorities of 52.4 percent to 16.4 million euros, year on year.