A rocky engagement

After a long round of negotiations and lengthy contacts between National Bank Governor Theodoros Karatzas and Alpha Bank Chairman Yiannis Costopoulos, and with the government displaying a discreet interest, the two banks managed to keep hopes of their planned merger alive. A night of talks and yesterday morning’s contacts between the two protagonists bore fruit in a joint communique which kept the merger alive but provided no guarantees for the future. The two sides are now expected to start renegotiating how the new bank’s business units will be distributed between the two partners. «We averted the worst outcome,» said one of the key players in the affair, when asked to comment on the joint communique. In the statement, the two banks acknowledged the hurdles in the way of the merger but stressed that they were making an effort to overcome them. «As in every major undertaking, so the merger of two large and equal banks presents difficulties in various sectors. An effort is being made to deal with these difficulties in a spirit of understanding and good faith,» the statement said. «Our goal continues to be the creation of a strong Greek bank with a European structure which will operate as a private enterprise of the modern banking sector. This, after all, is what the interests of the national economy, our shareholders and the employees of both banks demand,» it said. The mention of «private enterprise» reveals the magnitude of the problem in the intended marriage of a state-controlled company with a private one. Their different mentalities and habits, which were evident throughout the two banks’ hierarchies, nearly led to the wrecking of the deal. In the broader business sector, though, many believe that fresh problems will arise. Indicative of this was the attitude of a senior official of Alpha Bank, who, speaking anonymously, noted yesterday that an effort will be made to cement the deal but that he would not place the chances of the merger being completed at more than 50 percent. «We will do our best, but if we don’t succeed, it won’t kill us,» the same official said. The joint statement came after a meeting of Alpha Bank’s board and after Karatzas and Costopoulos had held a two-hour session of talks in the National Bank governor’s office. Sources close to Costopoulos say that the differences between the two banks are not so much a quarrel over who will get to run which business unit in the resulting corporate organization, but rather a clash of cultures.

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