Reuters logo
Greece's lenders resist lending more for NBG-Eurobank: official
April 5, 2013 / 5:15 PM / in 5 years

Greece's lenders resist lending more for NBG-Eurobank: official

ATHENS (Reuters) - Greece’s foreign lenders are seeking assurances that National Bank’s (NBG) (NBGr.AT) takeover of Eurobank EFGr.AT will not result in a further demand for funds to recapitalize the banks, a senior finance ministry official said on Friday.

A Greek Orthodox priest walks past a closed Postbank branch during a 24-hour strike of bank employees in Athens October 24, 2012. REUTERS/Yorgos Karahalis

The official added, however, that the “troika” of the European Commission, the European Central Bank and the International Monetary Fund had not asked for the deal to be scrapped.

The troika has expressed concerns about the deal clinched in February given that the combined entity would have assets worth almost the size of Greece’s gross domestic product, bankers and the country’s central bank chief have said.

But asked whether the troika had demanded the deal be scrapped, the finance ministry official said: “No”.

“They want to be convinced on the synergies,” the official said. Asked whether this meant they were seeking assurance that they would not need extra money for their recapitalization, the official said: “Yes, exactly.”

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

The combined NBG-Eurobank would have assets of 170 billion euros ($221.4 billion) compared with the country’s 190 billion GDP, and 36 percent of total deposits. The two banks need 15.6 billion euros in new capital.

Officials from the EU and the IMF returned to Athens this week to monitor progress under Greece’s latest bailout, with talks focusing on bank recapitalization and public-sector lay-offs.

The official added that troika representatives were not satisfied with the figures they were given by the government on an unpopular lay-off plan that has angered public sector workers in Greece.

Lay-offs are a deeply sensitive issue in Greece, which is struggling with record unemployment of over 26 percent.

Reporting by Lefteris Papadimas, Writing by Deepa Babington; Editing by Clelia Oziel

Our Standards:The Thomson Reuters Trust Principles.
0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below