Credit Agricole is negotiating exclusively with Alpha Bank the sale of Emporiki

Credit Agricole yesterday announced that it is negotiating exclusively with Alpha Bank the sale of Emporiki Bank, in a deal with a symbolic price of 1 Euro, according to a press release by the French group.

"Credit Agricole and Alpha Bank intend to complete the transaction on December 31st, 2012, as obtaining all the necessary approvals from the relevant authorities is necessary", the press release states.

Upon completion of the deal, Alpha Bank will acquire Emporiki Bank, recapitalized with cu 2.85 billion Euros, according to the press release by the Greek bank. Credit Agricole will recapitalize Emporiki Bank with an additional 500 million Euros, on top of the 2.3 billion Euros has already injected in it in July.

The French group will also subscribe to an issue of convertible bonds, which will be issued by Alpha Bank. The bonds will be convertible into Alpha Bank stock, subject to certain conditions and upon the initiative of Credit Agricole, according to the press release of the French institution.

Credit Agricole considers that this deal is in line with the strategy of the group to consolidate its financial structure and to focus on basic business. Furthermore, it will allow the French group to reach its solvency ratios by the end of 2013.

Alpha Bank also claims that the purchase of Emporiki Bank will contribute to the consolidation of the Greek banking sector.

"The deal represents an important step towards the restructuring of the Greek banking system, and the new group will have a market share of 19% on the deposits segment, and 25% on the lending segment", according to Alpha Bank.

The French group will maintain open the current line of credit for Emporiki Bank, so that the bank will have adequate liquidity and will not represent a burden for the buyer.

The current funding of Emporiki Bank by the French group will be reduced by 700 million Euros, and the residual funding, calculated on the date of the transaction, will be guaranteed through quality assets and will be repaid in three tranches, of which the last at the end of 2014, according to the press release by the French group.

Credit Agricole, the third largest bank in France, wants to withdraw from the Greek market, after lenders were badly affected by the sovereign debt crisis and the massive increase in non-performing loans, determined by the economic decline of last year.

Also competing in the race for the acquisition of the Greek arm of the French bank were National Bank of Greece and EFG Eurobank.

In June, the French group decided to transfer all of the subsidiaries of Emporiki Bank in the Balkans, including the one in Romania, to Credit Agricole. The National Bank of Romania has given its approval for the acquisition of the shares of the subsidiary of Emporiki Bank in Romania by Credit Agricole, and in August, the name of the lender was changed to Credit Agricole Bank România.