Alpha Bank is not convinced, National Bank is insisting

The board of Alpha Bank seems to be adamant and before the opening of the stock market today, will announce the reasons for which they thought the NBG proposal for a friendly merger of the two banks was unattractive.

On its part, the National Bank insists that the proposal is generous and explains not only why it cannot be compared to the 2001 one, but also that it is is much more advantageous . In 2001 there was no premium, while today we offer more than 22% and total cumulative added value, with savings and synergies from this merger at more than 60% for shareholders of Alpha. It's a very generous proposal, in line with European standards, NBG says.

Answering Alpha’s argument about uncertainty, NBG maintains that taking the initiative amidst a crisis is a must in order to lead the banking system out of the recession. Attempting to answer everything that was leaked about the disappointment, whether true or not, of the people at Stadiou about the administrative structure of the new bank, NBG says that «in 2001 the proposal provided for an NBG president and executive directors from Alpha, but lower positions were mostly filled by NBG members. Now the structure we are proposing is completely balanced, it’s actually a state of co-administration».

700mil euros in synergies

In addition, NBG emphasizes once again that banks today are much bigger, with a significantly greater investment abroad, which allows for greater and faster achievement of synergies. So in 2011 the estimated synergies that will be achieved within three years range from 550 to 700mil per year and, most importantly, will be achieved "at virtually zero social cost», as indicated characteristically.

Despite the fact that formally NBG seems adamant in its proposal, market circles estimate that an improvement is not excluded, something that even since the stage of preparation has been firmly dismissed by Alpha-aligned sources, arguing that the improvement margins were not enough to satisfy Alpha shareholders.

Meetings Marathon

The administrations of the two banks had been meeting throughout the weekend, helped by their international advisers preparing answers to questions that were not asked and readying their potential weapons for the start of the week, with serious worries about the mood of the stock market, regarding the deal that was a non-starter.

At noon on Saturday, the board of Alpha met in the central offices at Stadiou Str. for more than 3 hours, setting up a new meeting for the next day so they could release a detailed announcement explaining why they thought the NBG proposal was unsatisfactory.

In the same evening, Giannis Kostopoulos met with Dimitris Matzounis and members of Citibank, which has taken the role of advisor in the deal.

On Sunday, despite all the above and after another meeting, Alpha kept on being silent, even on the part of Tasos Giatis, the talkative president of the bank workers union.

And in Aiolou, NBG was at the edge of their seat, being kept in the dark awaiting for an announcement that never came, without official or unofficial information on the part of Alpha.

An opposite effect if NBG had moved aggressively

Leaks that were neither confirmed nor denied, have Alpha being put under unbearable pressures from governmental and banking agents in order to rethink the proposal. The scenarios even talked about an aggressive proposal from NBG, which the majority of shareholders of the bank run by the Kostopoulos family, which retains almost 10% of the shares, will be called upon to answer.

The Alpha characterized such a move as a «faux pas», and the stock market bet that if the NBG moved aggressively, the ego of Alpha will receive a heavier blow which may lead it into the arms of another, implying the Latsis Group, with whom talks did not bear fruit, again according to information because of the valuations and the structural form.

The government, after the statement by Finance minister Giorgos Papakonstantinou on Friday afternoon, seems not to be adopting an official stance in the bank battle. Governmental circles however, reiterated that the state is already a holder in all the Greek banks and obviously irritated, stressed that no banks were vexed when they used the state package, from which, it should be noted, Alpha has received 1bil euros (so has Eurobank), which will probably be asked back during this year; this means that the bank will be asked to replace the capital to sustain high enough capital rates.

The thin union balances

At the background battle the union people have taken a place too. It is characteristic that Giatis, representative of the employees of Alpha play now – as in 2001 –  an important role and it should not be overlooked that his influence and role are significantly affected if the deal goes forth.

It is noted that recently Giatis moved to elections to enforce the representativeness of his association. Even though it might seem like it is unrelated to the ongoing developments, it is not. The chairman of the employees of Alpha prepared in case a merger with the Eurobank of Latsis group, a bank of like size and therefore the strengthening of the terms of the proportion of representation of the club would be crucial for the union leadership in a new shape of Eurobank and Alpha. The proposal and particularly the possibility of a merger with NBG, is changing the correlations completely due to the enormous difference in size, which explains any concerns by Giatis.

The “no” from OTOE

But even OTOE (Hellenic Federation of Bank Employee Unions) run by the sympathetic to the government and the National, having come from it, Stavros Koukos, with yesterday’s announcement takes a pretty aggressive position against the bank reporting characteristically «The moment that the protection of employment in banks is the major issue, the moment that employees are the first that will be called to support in all levels these moves, unfortunately were ignored in the proposal of the National Bank, thus confirming the distress signal sent by OTOE, setting as main request at the sectoral collective agreement the protection of the work places in banks in view of buy-outs and mergers, to meet until today the quibbling and negativeness of the banks.

We have stressed repeatedly that bank mergers should require a comprehensive business and social plan that fully justifies their feasibility, describe in detail the benefits and guarantee success without turbulence in the financial, business and social level, using the workers in the prospect of development of the banking system and not have them considered as «collateral damage» due to the circumstances that allow the leveling of everything.

It also does not leave out of scope neither the government, which as stated in the statement of OTOE «should not suffice in encouraging statements of such moves, which it calls as  «welcomed», without setting the economic and social contexts within which they must move, when it knows better than everyone else that recession and unemployment are the main problems of the country today and in banks that are the core tools to address them, experiments, crowding and devaluation of the labor factor are not allowed».

They are watching…

In he rest if the banks and the BoG, they are watching with lively interest these developments and revaluate their positions, knowing better than the rest that even if the Alpha-National deal does not go forth, the money flow will not stop and it is assured that until summer a lot will be traced towards the resetting of the map.