EFG Eurobank Ergasias SA (EUROB), Greece’s second-biggest bank, said the failure of a proposed merger with Alpha Bank SA (ALPHA) is incompatible with efforts to recapitalize the Greek banking system.
“The cancellation of the merger means the loss of synergies worth as much as 800 million euros ($1.02 billion) a year which would have mitigated losses from the writedown on holdings of Greek debt held by the two banks,” Athens-based Eurobank said today in an e-mailed statement.
Alpha shareholders today approved the bank’s proposal to cancel the merger with Eurobank, according to a filing to the Athens bourse from the bank.
“The new entity that would have been formed by the merger would now need 9 billion euros in extra capital and that would have resulted in the nationalization of the bank,” Yiannis Costopoulos, president and chief exectuvie officer of Alpha, Greece’s third-largest lender, told the bank’s shareholders today in Athens.
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