Greek banks merge to fight financial crisis
Published 30/08/2011 | 08:00
Greece's second and third largest lenders, Eurobank and Alpha Bank, yesterday announced plans to merge to better withstand the country's acute financial crisis.
The widely anticipated merger would create Greece's biggest bank, and was immediately welcomed by the country's Socialist government.
The move saw shares surge on the Athens Stock Exchange, with the banking sector up nearly 20%, while shares in National Bank of Greece, the country's largest lender, were up 29%. The merger will also see investment from a Qatari investment fund, Paramount Services Holding.
Greece is in the throes of a major financial crisis, and only avoided bankruptcy after two international bailouts agreed over the past two years, worth a combined total of €219bn (£194bn).
"The decision by the two banks to proceed with a merger is a positive development," finance minister Evangelos Venizelos said.
"This initiative demonstrates that today's crisis could serve as a corrective opportunity and provide a boost in the financial sector as well as in the real economy," he added.