NEWS

National consolidates

The banking sector suddenly showed action yesterday after a long hiatus as the National Bank of Greece announced that it would absorb its investment banking subsidiary, and Aspis Bank said it would buy out ABN AMRO’s local network. Yesterday morning the boards of National Bank and the National Investment Bank for Industrial Development (NIBID, or by its Greek acronym, ETEBA) held a joint meeting and approved of a proposal to merge the two banks, in light of the current economic climate, the drop in investment banking and the need for the National Bank group to contain its costs. National, which is Greece’s largest bank, holds a 75-percent stake in ETEBA. An announcement by National said the share exchange ratio must still be determined and will be put before the two banks’ boards as soon as possible. «The merger constitutes one more step in the continual effort to improve the group’s structures and adapt it to developing conditions and demands both on the international and domestic market,» National’s statement said. A little later, news came of the agreement between Aspis Bank and ABN AMRO for the former to buy the latter’s network, most of its assets in Greece and its leasing and insurance broker subsidiaries. The agreement is for the Dutch ABN AMRO group to get a 7-percent stake in the Greek bank. The deal excludes assets related to ABN AMRO’s dealings with shipping and large multinational companies. In order to serve them, the Dutch group will keep a representative office in Greece. National Bank’s move with ETEBA had been expected after Governor Theodoros Karatzas’s recent statement at National’s general meeting that one of the group’s priorities would be to cut costs drastically and make its structures more rational. But it still surprised the market yesterday, strengthening shares of both banks. The decision is part of a wider cost-cutting effort, including a voluntary retirement program (which 400 employees have chosen). Also, National Bank has decided to absorb its French subsidiary, Banque Nationale de Grece (France), but will still maintain a presence via an office it will set up in Paris. ETEBA is the third subsidiary to be absorbed by National Bank, following the National Mortgage Bank and the Mortgage Bank.