National, Alpha go separate ways

Greece’s two largest banks, National and Alpha, called off their planned merger on Saturday, less than three months after announcing their plans to join forces in order to become a player on the European level. In separate statements, state-controlled National and private Alpha each blamed the other for the collapse of last-ditch talks on Saturday. The merger would have made the new bank the 25th largest in Europe. According to sources, the collapse was finalized by Alpha’s deputy governors demanding at a meeting with their opposite numbers on Saturday morning that all that had been agreed upon be renegotiated (except for the share-swap ratio). Their proposal would have meant that Alpha, the smaller partner, would have played the dominant role in the new bank. National Bank governor Theodoros Karatzas then called Alpha chairman Yiannis Costopoulos and the two agreed to end the effort. The government expressed regret at the merger’s collapse but said this would not hinder it in its pursuit of reforms to the Greek economy. The main opposition New Democracy called for the resignation or dismissal of Karatzas, while also saying that the merger’s collapse was a good thing. «When the merger agreement between National Bank and Alpha Bank was announced last November, it was considered a positive development for the Greek economy, as it expressed the strategic creation of large Greek companies with a strong European presence, size and orientation,» National Economy and Finance Minister Nikos Christodoulakis said on Saturday. «In the course of two banks’ administrations bringing to fruition the merger plan, difficulties arose, which, regretfully, obstructed the final successful outcome of the undertaking,» he added. «But the obstacles and difficulties will in no way detract from the need for structural changes, privatization and the strengthening of Greek businesses both in the banking sector and other fields of economic activity.» New Democracy spokesman Theodoros Roussopoulos reminded reporters that Prime Minister Costas Simitis had said of the planned merger: «We supported this undertaking and we hail it.» The opposition spokesman accused the government of «showing a lack of responsibility» and of trying «to make political hay of the issue.» He also accused National Bank’s board of dealing with the planned merger «superficially» and of following the government’s orders. «Mr. Karatzas must present his resignation immediately. Otherwise the prime minister ought to dismiss him today,» Roussopoulos said. «The National Bank cannot endure, cannot look to the future, with such an administration.» The party’s spokesman for economic issues, Giorgos Alogoskoufis, said that ND had been against the merger from the start. «It is proved today that the aim, in essence, was to nationalize the largest private bank in the country,» he said, referring to Alpha. «Fortunately, this trick failed. And this development is in the country’s favor,» he said. Government sources said that Karatzas was not going to be replaced. National’s employees’ union also came out strongly in support of him. The blame game In statements explaining the collapse of the planned merger, National Bank and Alpha Bank presented their side of the argument and blamed the other. «The National Bank of Greece was forced to take this decision because of the failure to make any substantial progress in the course of negotiations for the merger, despite the systematic and conscientious efforts made by the administration,» the state-controlled bank said in a statement shortly after the collapse of talks. «The NBG’s duty toward its Greek and foreign investors demanded that this loose end not remain so, when there seemed to be no hope of success, given Alpha Bank’s insistence on a radical departure from what had been agreed upon and had been stated in joint statements.» Alpha Bank explained its own reasons, saying it «was forced to end the efforts» for the merger. «During the negotiations, it was noted that it was impossible to reach agreement on issues relating to the new bank’s operations with private business criteria and equality between the two sides, the points which were the basis on which the merger was agreed upon as one between equals,» the statement said. «Alpha Bank continues its autonomous and creative course, faithful to the principles which made it the largest private bank in Greece.» «I feel pretty strong, maybe just as strong as last year,» she said. «I can hang in there for another week, hopefully,» she said.Capriati will play Italian Rita Grande in the fourth round.