ECONOMY

NBG, Alpha firm over merger goal

National Bank of Greece (NBG) and Alpha Bank yesterday insisted on forging ahead with their goal of creating a pan-European financial institution, saying they hope to resolve the hurdles encountered along the way with understanding and trust. In a joint statement issued yesterday, the two banks said, «Our goal continues to be the creation of a strong Greek bank with a European structure.» Noting that problems have cropped up in various areas, the banks said they hope to iron out the glitches in a «spirit of understanding and good faith.» Analysts said the fact that the two banks did not call off the merger deal yesterday, heralded as the biggest in Greek financial history, was a good sign. They warned, however, that the following days were critical. Conflict over the announced corporate set up, with Alpha Bank executives complaining that too many of the important functions were going to NBG managers, fueled rumors of a possible dissolution of the merger over the weekend. The discord sent shockwaves through the market on Monday, shaving more than 3 percent off both NBG and Alpha shares. The banking turmoil dragged down the general share index as well. NBG posted a 0.08-percent drop yesterday while Alpha was up by 0.43 percent. Contalexis Financial Services analyst Vassilis Vlastarakis said that the problems plaguing the two banks were not uncommon in mergers of such magnitude. «Failed mergers between US conglomerate General Electric and Honeywell, and Germany’s Deutsche and Dresdner banks are just some of the many examples of unforeseen problems blocking a mega-deal,» he pointed out. Vlastarakis said the collapse of the NBG-Alpha merger could unsettle the market which has been on the upswing since the announcement of the agreement last October. «This could have a big impact on the market,» he warned. He suggested that the State, the biggest stakeholder in NBG, step in to help resolve the issues. The Greek Federation of Bank Employee Unions yesterday urged the two banks to resolve their problems by working together and upholding their agreement. The union is due to meet today to discuss the issue. The employees’ union of NBG said it will seek clarifications from NBG governor Theodoros Karatzas regarding yesterday’s announcement.