The recent announcement by Banco Comercial Português (BCP) of its decision to withdraw from the Netherlands-based multinational insurance group Eureko, which owns Greece’s Interamerican, has left the Greek market uneasy about the likely impact of a continued global stock market crisis. In September 2000, the then chairman of Interamerican, Dimitris Kontominas, and of BCP, Jorge Jardim Goncalves, announced in Athens their plan to set up Novabank, which proved to be a most aggressive player, intensifying competition in the Greek market. BCP had been a model for a number of Greek bankers who had visited Lisbon to «copy» its innovative systems and organizational structure. About 18 months ago, Kontominas surprised everyone by announcing the 100 percent sale of Interamerican -Greece’s biggest private insurance company – to Eureko, 25 percent of which belonged to BCP’s insurance arm Seguros e Pensoes. Kontominas became a 5 percent minority shareholder of Eureko, and a member of its board of directors. In Novabank, BCP retained a 50 percent interest plus one share, Kontominas 40 percent minus one share and Interamerican a 10 percent interest. Interamerican’s profitable mutual funds arm Intertrust came under Eureko’s control. On December 14, 2001, Joao Talone, Eureko’s managing director and member of BCP’s board of governors, resigned from both posts, citing personal reasons. However, as head of the group’s international expansion plan, he had been held responsible for various unprofitable investments. According to officials of Interamerican at the time, Talone’s resignation was part of Eureko’s reorganization plan and restructuring of its board of directors, which would now have eight members. The global stock market crisis, which has dealt yet another serious blow to the insurance industry, put off plans for Eureko’s listing on the Amsterdam bourse and caused a new upheaval within the group. Goncalves came under severe criticism for having masterminded BCP’s participation in Eureko, and the board of directors ultimately decided to withdraw from the group. Last week it was announced that BCP will sell a 20 percent stake to Eureko and retain a small interest, on the order of 5 percent. The buyer will be Holland’s second-largest insurance company after ING, Achmea, which will now be Eureko’s main shareholder with an 80.2 percent interest. BCP regains full control of Seguros e Pensoes and, according to a statement, its strategy will now focus on full control of its subsidiaries. These extensive changes leave BCP, which is listed on the bourses of Lisbon, New York, Frankfurt and London, with a much worsened problem of capital sufficiency, as it will have to pay Eureko an additional 150 million euros due to the difference in the evaluation of the shares swapped (100 percent of Seguros e Pensoes and 20 percent of Eureko). The Greek interest in these extensive changes focuses on their repercussions for Interamerican, controlled by Eureko, and on Novabank, where BCP has majority control but Eureko also has a 10 percent stake. Kontominas, essentially representing Eureko’s interests, has a 40 percent share. If rumors are anything to go by, Novabank needs fresh capital to finance its expansion at a difficult time. According to the same rumors, Yiannis Pehlivanidis, the recently resigned managing director, did so after disagreeing with the decision of shareholders, and particularly Kontominas, to trim expansion plans for the time being. Meanwhile, Eureko has decided to go ahead with a 50 million euro share capital increase in Interamerican with a view to boosting reserves. Interamerican is expected to post losses for the third consecutive year this year. The life sector is showing a 3 percent fall in premium revenue and the 13-14 percent increase in revenue from other sectors, but this is not enough to offset the decline as life is the major income earner. Eureko officials in Athens are said to be pressing for 4-5 percent cost cuts in the next two years. The group is thought to be facing difficulties, having been left without a banking partner and suffered a failure of its investment in Poland. The other big question is what BCP is planning for Novabank, given its declared strategy of exercising full control over its subsidiaries. Many are wondering whether it wishes to retain its interest and whether this means it will strive for full control. If it exits Greece, it will be interesting to see who will step in its place, at a time that is far from ideal for such deals.