NEWS

A banking colossus is born

The greatest business merger in Greece’s postwar history is in progress, with the National Bank of Greece and Alpha Bank saying yesterday that the boards of the two would meet at 11 a.m. today to decide on the issue. The two largest banking groups in the country have had an open channel of communication for a while and yesterday Alpha chairman Yiannis Costopoulos and National chairman Theodoros Karatzas agreed to the merger that will create, as Karatzas put it, a national champion capable of playing a role in the single European market. A great new Greek bank is emerging, he said. We could not do this on our own, together we can, Costopoulos added as the two left the Bank of Greece where they had informed the central bank’s governor, Lucas Papademos, of the planned merger. Today they will set out the details of the planned merger and the way in which the new superbank will be administered. It is expected to be called Alpha National. Karatzas is expected to be president while Costopoulos will be called executive president and will also be the managing director. Initially, the two banks will swap 16 percent of their shares, with a ratio of 5 Alpha shares for 4 of National’s before a complete merger later. The deal is worth about 10 billion euros and will lead to a bank with assets of 82 billion euro and 23,000 employees. It will cover 52 percent of the entire banking sector’s assets and hold 53 percent of all deposits and 44 percent of loans. The State’s stake in the new bank will be limited to 16-17 percent, implying that this is one of the greatest privatizations in Greece with great political significance. For decades the state-controlled National Bank was every Greek government’s lever with which it manipulated developments. Even before news of the merger broke, when rumors abounded, it was greeted with enthusiasm by investors who drove the Athens bourse’s general index up 3.54 percent as National gained 4.39 percent and Alpha 5.74 percent. On Wall Street, National’s stock was up 23 percent at one point. Aegean jousts. Twelve Turkish jet fighters, flying in groups of four, were chased off by Greek interceptors in the central Aegean yesterday after breaking flight regulations in the Athens Flight Information Region and entering Greek airspace. The new defense minister, Yiannos Papantoniou, watched one interception live on the ministry’s operations center radar. He also told journalists there is no issue of sending Greek forces to Afghanistan.