EU, IMF resisting Greek bank NBG's takeover of Eurobank: sources

Sat Mar 30, 2013 5:49pm EDT
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By George Georgiopoulos

ATHENS (Reuters) - Greece's international lenders have asked Athens to halt National Bank's (NBGr.AT: Quote) takeover of rival Eurobank, worried that the resulting lender would be too big for the state to deal with, two bankers close to the talks told Reuters on Saturday.

The lenders' concerns come as an unexpected twist in the takeover deal, which was launched in October and completed with a share swap. The two banks have already begun integrating operations after getting approval by authorities.

National Bank, Greece's biggest lender, took over 84.3 percent of Eurobank EFGr.AT in February via a share swap as the banking industry consolidates to cope with the fallout from the country's debt crisis and a deep recession.

The European Union, European Central Bank and International Monetary Fund "troika" had raised issues over the size of the merged entity relative to Greece's gross domestic product (GDP) and the banking sector as a whole, the sources said.

The combined NBG-Eurobank group would have assets of 170 billion euros, almost the size of the country's 190 billion GDP and 36 percent of total deposits.

"Pretty much these are the arguments put forth by the troika," one of the bankers told Reuters, declining to be named.

NBG had offered 58 new shares for every 100 shares of Eurobank in the deal.

The lenders' concern comes as fellow euro zone member Cyprus reels under a banking crisis that has forced it to shut down its second largest bank, Cyprus Popular Bank CPBC.CY, also known as Laiki, and make an unprecedented raid on deposits over 100,000 euros as part of an EU-IMF bailout.   Continued...

A woman (L) makes a transaction at an ATM machine outside a Eurobank branch in central Athens October 5, 2012. REUTERS/John Kolesidis