ATHENS Greece's securities regulator on Monday gave conditional approval to National Bank (NBGr.AT) to buy rival Eurobank EFGr.AT.
This will allow National Bank, the country's biggest lender, to launch a formal offer for Eurobank through a share swap.
"The board approved on conditions the prospectus regarding the public tender offer by National Bank of Greece," the Capital Markets Commission said without giving further details.
In October, National Bank (NBG) offered to buy Eurobank to create the country's biggest bank, setting in motion a long-expected wave of consolidation in the banking sector, battered by rising bad debts and losses from the country's debt restructuring.
NBG is offering 58 new shares for every 100 shares of Eurobank. About 43.6 percent of the Eurobank's shareholder base has already accepted the offer, NBG has said.
The regulator was not immediately available to comment further.
(Reporting by George Georgiopoulos. Editing by Jane Merriman)