Fleeing rising worries over a potential Greek exit from the Eurozone, French bank Credit Agricole is pushing to take direct control of its units in Bulgaria, Romania and Albania from Greek subsidiary Emporiki Bank, it announced on June 15.
"This intra-group transaction is the last step of a process developed since the beginning of 2009 to reinforce links between Credit Agricole SA and Emporiki Group's subsidiaries," Emporiki said. However, the move is clearly designed to pull assets out of Greece as the risk of a "Grexit" continues to spook Europe.
"This agreement will also allow Emporiki to further rationalize its corporate structure and reinforce its focused efforts to effectively deal with the current circumstances and challenges," the statement continued. The deal is subject to approval from the relevant central banks.
Also on June 15, Standard & Poor's confirmed Credit Agricole's long-term credit rating at 'A' with a stable outlook, saying it believes the banking group's "capitalization would be sufficient to absorb the impact of Greece exiting the eurozone." It also noted the French bank has reduced funding to Emporiki as well as its exposure to Greek sovereign debt.
Emporiki has been a source of heavy losses for Credit Agricole ever since the French bank bought the Greek lender in 2006. Moody's downgraded Emporiki by two notches to 'Caa2', worrying that a Grexit would lead to a deposit freeze at Greek banks that "would prevent the parent groups from supporting the obligations of their Greek subsidiaries towards depositors and other creditors, regardless of their financial capacity or willingness to do so."
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