Piraeus Bank and Dutch insurance group ING Group are due to announce in the coming days an alliance between them. Sources said the two reached an agreement last week. The deal was sealed following a visit to Athens early last week by the head of ING’s European operations. It was preceded by many time-consuming discussions. ING is expected to acquire a stake of not more than 5 percent in the merged Piraeus and ETBA Bank. The exact size of the holding will be determined after the integration of the two banks. Piraeus, in turn, is due to take a 20 percent stake in Greek insurance company Nationale Nederlanden, which is part of the ING Group. Under the terms of the agreement, Piraeus and ING will expand into the Balkans together. The partners plan to set up joint ventures, with the Greek bank holding control and management of the companies. Sources said discussions on the size of the stake to be held by the partners had held up the deal. Piraeus and ING also intend to form venture capital vehicles, which will initially concentrate on asset management, pension fund management and bancassurance activities. The partners will be distributing their products and new joint services via each other’s network. Piraeus presently has more than 200 branches while Nationale Nederlanden maintains a network of 90 offices and more than 2,000 insurance agents countrywide. The collaboration between Piraeus and ING takes on particular significance in view of the fact that the former has declared its intention to bid for state-controlled Agricultural Bank (ATE). ING is similarly interested in ATE which, despite its problems, has two sound insurance subsidiaries. Sources said that when media reports pointed to Piraeus’s interest for ATE, ING executives got in touch with their counterparts at Agricultural Insurance and voiced the possibility of a strategic alliance between them in the near future. It is therefore possible that Piraeus and ING might have discussed the possibility of a joint bid for ATE, a move which would strengthen the Greek bank’s position in light of the current wave of consolidation in the local banking market. By linking up with one of the five biggest insurance groups in Europe, Piraeus will be able to venture into a sector that has significant growth potential. For its part, ING will have immediate access to the local banking industry, an area in which it has attempted to build up its presence. At the same time, both groups can expand their networks and promote joint products and areas of activity such as bancassurance and asset management. The latter is of especial significance to ING as Piraeus will have a broader bond portfolio after its takeover of ETBA Bank.