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Shares in two Greek banks plunge 30% on merger suspension

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(Globalpost/GlobalPost)

Shares in the National Bank of Greece (NBG) and Eurobank plunged by 30 percent in early trading on the Athens stock exchange on Monday, following a suspension of their plans to merge.

The Athex index of leading shares was down by 1.69 percent at 809 points shortly after opening, with a sub-index of banking stocks off by 16.67 percent, after the Greek central bank said late Sunday that the four biggest banks in the country would be recapitalised separately.

The country's other two main lenders, Piraeus bank and Alpha bank, showed losses of 20.63 percent and 15.09 percent in early trading.

On Sunday, a finance ministry source announced a suspension of the NBG-Eurobank merger, given that the four banks were to be recapitalised on their own, a decision confirmed on Monday by the two banks.

Greece's international creditors, the European Union, International Monetary Fund and European Central Bank, had expressed concern that the entity created through a NBG-Eurobank merger would dominate the market and would be hard to recapitalise.

A central bank statement said on Sunday: "The Bank of Greece confirms that the recapitalisation process for the four systemic banks (National Bank, Alpha, Eurobank, Piraeus) is proceeding normally and will conclude in April."

All four banks are to hold shareholder meetings to approve capital increases this week, the central bank added.

kv-hec-bur/wai

http://www.globalpost.com/dispatch/news/afp/130408/shares-two-greek-banks-plunge-30-merger-suspension-0