Alpha Bank’s board has asked shareholders to cancel the merger with EFG Eurobank because of the impact of Greece’s debt restructuring on banks. Shareholders of the two banks approved the merger in November, which would have created Greece’s largest bank, reports Mediafax. However, the bond conversion that reduced Greece’s government debt by more than €100 billion has resulted in much higher losses for the two banks than estimated when the merger agreement was signed. “The board of Alpha Bank will convene a general meeting of shareholders, where it will propose the revocation of the merger decision adopted on 15 November,” a bank spokesman said. Another Alpha Bank official told Reuters that the shareholder meeting will be called for March 27.

The Alpha Bank Romania – Bancpost merger would have been the biggest consolidation ever carried out in the Romanian banking sector and would have created the third largest bank on the market, with assets of 30 billion lei. The Competition Council approved the merger of Alpha Bank Romania and Bancpost last year.
Alpha Bank’s exposure to Greek government debt is about 50% lower than that of EFG Eurobank. Analysts believe Alpha’s withdrawal from the deal could pave the way for other mergers or acquisitions in the Greek banking system.

The merged group would have been the 23rd largest bank in the eurozone by assets, with total assets of €145bn, loans of €98bn and deposits of €68bn.

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