Alpha Bank- EFG Eurobank merger to create third largest lender in Romania.

By bne IntelliNews August 30, 2011
The merger of the two Greek financial groups EFG Eurobank and Alpha Bank, approved by the shareholders earlier this week, will have as a direct effect in Romania the merger of the 8th and 9th largest banks and the formation of the third largest local lender. IntelliNews Comment: The merger takes place at a time when the Romanian banks are already striving to streamline their operations by adjusting down their networks and personnel in line with subdued retail operations. Furthermore, even if the two banks are of a similar size in Romania, their profitability differs rather significantly. Finally, while BancPost is a former state-owned bank taken over by EFG, Alpha Bank Romania is the result of a greenfield investment. EFG Eurobank, owning in Romania the majority stake in BancPost bank and related financial services companies, reported losses of EUR 4.6mn from its Romanian operations in H1 compared to a net profit of EUR 10.7mn last year, according to the H1 financial results reported on its web site. The net assets of the group in Romania diminished by 9.5% ytd and 16.4% y/y to EUR 4.85bn at the end of June. The NPL, defined as loans with overdue payments in excess of 90 days, accounted for 16.4% of the total book loan of EUR 3.4bn at the end of June. On the other hand, Alpha Bank of Greece reported gross profits of EUR 5.4mn derived from its operations in Romania in H1, indeed 77.4% down y/y. The bank reported a NPL ratio in Romania of only 8.4%. The stock of loans increased by 15.3% y/y to EUR 3.5bn at the end of H1.

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