June 13, 2014 / 10:45 AM / 4 years ago

UPDATE 1-Alpha to buy Citibank's Greek retail business

* Alpha to buy Citi’s Greek retail ops for 2 mln euros

* Part of consolidation trend in industry

* Citi says wants to focus on corporate clients (Adds details)

By George Georgiopoulos

ATHENS, June 13 (Reuters) - Alpha Bank, Greece’s fourth-biggest lender by assets, said on Friday it had agreed to buy Citibank’s loss-making retail operations in Greece for 2 million euros ($2.72 million), the latest deal in the sector’s consolidation.

Greece’s debt crisis has hammered its banking industry, prompting foreign players, including Credit Agricole, Societe Generale and Portugal’s Millennium bcp , to sell local units to Greek lenders in recent years.

Hit by a sovereign debt restructuring and rising loan impairments during a deep six-year economic slump, the industry has consolidated down to four big players after a wave of acquisitions and the winding down of non-viable banks.

The fortunes of National, Piraeus, Eurobank, and Alpha, which now control more than 90 percent of the banking market, have begun to improve after two recapitalisations and regained capital market access.

On Friday Eurobank said it had hired five investment banks to arrange a possible bond sale, becoming the fourth Greek lender to tap international investors with a senior unsecured bond issue.

Alpha’s statement confirmed what banking sources told Reuters on Thursday about a deal for Citi’s local retail operations.

The Greek bank said the acquisition would contribute to its pre-provision income from the first year and improve liquidity ratios.

The deal involves Citi’s wealth management unit with 2.1 billion euros of client assets, including deposits of about 1 billion euros, credit card loan balances of 400 million euros and 20 retail branches.

Citibank, which started shipping and corporate lending operations in Greece in 1964 and expanded into retail banking in the 1980s, said the sale was part of its strategy to divest non-core operations and focus on corporate and shipping clients.

The sale, which is subject to regulatory approval, is expected to close in the third quarter of 2014. A total of about 730 Citi employees will be transferred to Alpha Bank. (Editing by Pravin Char)

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