Greece's Eurobank, Alpha Bank in merger deal

Greece's second and third largest banks, Eurobank and Alpha Bank, are expected to announce a merger on Monday to better face the country's recession and severe debt crisis, Greek banking sources told Reuters on Saturday. The government has been pressing banks for months to merge to be better placed to cope with sovereign debt downgrades, deposit outflows and a dwindling stock of eligible collateral needed to access European Central Bank funding.
"The deal is about a friendly merger between Alpha Bank and Eurobank, with the participation to a significant extent of the Qatar Investement Authority," a senior banker at Alpha Bank told Reuters. The banker, and another banking source involved in the deal, said the two banks will have board meetings on Monday, which will be followed by announcements and a news conference.
"EFG Eurobank and Alpha Bank are close to a merger deal," the second banking source said, adding that the merger will create the biggest banking group in south east Europe. "The new entity will have assets of 150 billion euros ($211.3 billion), 8 million clients, 80 billion euros of deposits," the banker said. "The Qatar fund will participate in the new entity through a rights issue," said the official, who declined to be named. "Qatar will be one of the major shareholders in the new entity."