National-Alpha merger in danger of falling apart
The merger between National Bank of Greece and Alpha Bank appeared to be on the rocks last night, over objections by executives of the latter to the planned corporate structure of the new bank. Alpha’s top executives found that the structure, which was announced on December 20, was weighted too heavily in favor of National Bank. National Bank Governor Theodoros Karatzas was making efforts late into the night to save the deal. This will depend on today’s meeting of Alpha Bank’s board, which will be presided over by Chairman Yiannis Costopoulos. It begins at 11 a.m. Karatzas and Costopoulos exchanged letters with compromise proposals yesterday but no solution was found. National Economy and Finance Minister Nikos Christodoulakis and Bank of Greece Governor Lucas Papademos were following the situation. The merger’s possible failure could have serious consequences, as the deal was heralded as the foundation on which Greek businesses could grow. If the merger falls through, as appeared to be a danger last night, the climate in the business sector will worsen. The political fallout, also, will be severe, capable of leading to the resignations of top senior bank officials. Under the merger deal, announced on October 31, Karatzas is to become executive chairman of the new National Bank of Greece and Alpha Bank Chairman Costopoulos, governor. Karatzas and Costopoulos would jointly preside over the new bank’s board of directors and executive committee. The merger was to be legally be completed in the first half of 2002. The five business units to be established are Investment Banking, under Alpha’s Constantinos Kyriakopoulos, Domestic Network, under Alpha’s Dimitrios Mantzounis, Operations, under National’s Theodoros Pantalakis, International and Retail Banking, under National’s Apostolos Tamvakakis, and Corporate Banking, under National’s Andreas Vranas. Alpha’s executives, however, wanted control over personnel and information technologies, which fall under the business unit controlled by National’s Pantalakis. Union representatives from both banks took part in the dispute, raising the level of emotions in support of «their» executives and, some say, expressing arguments that more senior officials could not voice. Alpha’s spoke of their bank’s being «nationalized,» a reference to the fact that the other bank was under state control until recently. Sources say that Alpha executives leaked reports that they were in contact with foreign banks (with references to BNP of France and Italy’s Unicredito) in order to be able to present an alternative to the planned merger. Sources say also that in the letter exchange, Costopoulos proposed that Alpha’s Mantzounis, (the reported leader of the rebels) should be granted more powers. But National said this would have handed over the new bank’s administration to Alpha completely. If the merger goes ahead, it will be the undisputed leader of the Greek banking market and the 22nd largest in the EU, with combined assets of 80 billion euros.
