Top Greek Banks Plan Merger

Two of Greece’s biggest banks are teaming up to fight the country’s banking crisis. Alpha Bank and Eurobank are set to merge into the country’s largest bank and one of the top 25 in the euro zone. “I am confident that the new combined entity will act as an important agent for the economic development of the country,” says Eurobank’s chairman. The combined entity will have pro forma total assets of some $212 billion, with a $3.8 billion 2010 pre-provision income, the Wall Street Journal reports.

Under the deal, Alpha Bank will officially absorb Eurobank; current Alpha shareholders will hold 57.5% of the combined bank, while Eurobank shareholders will own 42.5%. “"This sounds fair for shareholders of both banks, in our view,” says an analyst. “The new bank will be “well placed not only to withstand the current economic turbulence, but to create new opportunities and play a pivotal role in the future growth of the region,” Eurobank’s chairman added. Greece has been pushing its banks to join forces; the country’s central bank applauded the move as a “first step” in fixing the sector’s woes. (More Greece stories.)