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Last updated: October 1, 2012 4:24 pm
Crédit Agricole is negotiating to sell for €1 its Greek bank, Emporiki – bought in 2006 for €2.2bn – and to inject €550m in capital in the lossmaking bank under exclusive talks with Greece’s Alpha Bank.
The French bank, which is seeking to cut its losses in the eurozone’s most depressed economy, will convert into capital €550m of its existing €2.3bn funding to Emporiki, under the terms being discussed.
This follows the €2.3bn already injected by Crédit Agricole into Emporiki in July. The French lender would also subscribe to €150m in convertible bonds to be issued by Alpha Bank.
Analysts at Morgan Stanley said Crédit Agricole’s outlay was lower than they had feared. Crédit Agricole’s funding to Emporiki would fall to pro-forma €1.4bn down from €9.9bn at the end of June last year. It can also expect to get a tax break for the capital injections.
Alpha is the third-largest Greek bank, after National Bank of Greece, with assets of €57bn. A merger with Emporiki would see it overtake Eurobank EFG in second place. NBG and Eurobank were the other bidders for Emporiki.
Alpha’s share price on the Athens stock exchange jumped almost 8 per cent on Monday. Shares in Crédit Agricole rose 5 per cent to €5.65 on relief that a deal ending an unsuccessful foray into Greece was nearing.
Emporiki has cost the French bank €9bn in writedowns, capital injections and acquisition costs over the past six years.
The disposal is expected to be completed by the end of the year and would help Crédit Agricole achieve higher capital cushion targets set for the end of 2013, the bank said.
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