Two months after their proposed merger was put on hold, Greek banking groups EFG Eurobank and Alpha Bank announced on April 9 moves that would help them shore up capital adequacy ratios.
Alpha Bank was close to agreeing the sale of 30 per cent of its subsidiaries throughout Eastern Europe to the European Bank for Reconstruction and Development (EBRD), Bloomberg news agency said on April 9, quoting a report in Greek newspaper Real News.
According to the report, Alpha Bank would create a new umbrella holding group for its subsidiaries in Bulgaria, Romania, Serbia, Ukraine, Albania and Macedonia, and then sell a stake in it to EBRD.
Alpha Bank took a strong hit from the Greek government debt restructuring in March, having to write down about 74 per cent of its Greek government bonds.
With the proposed merger with EFG Eurobank, which would have created the country's largest bank and would have included an injection of Qatari funding, put on hold in January – mainly because of concerns that EFG Eurobank had even higher holdings of Greek debt – the sale of equity in its foreign subsidiaries could bring Alpha Bank the funds it needs to maintain mandatory capital ratios and avoid nationalisation
In a separate statement on April 9, EFG Eurobank said that it reached an agreement to sell its Turkish operations, Eurobank Tekfen, to Burgan Bank.
The deal would improve EFG Eurobank's tier-I capital ratio by 0.6 percentage points and its liquidity position by 800 million euro, the bank said in a statement. The sale was expected to go close, pending regulatory approval, in the third quarter of the year.