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Greece's Alpha, Eurobank hold merger talks
Trading suspended in Alpha Bank, Eurobank shares pending announcements on proposed merger
By The Associated Press

ATHENS, Greece (AP) ' The Athens stock exchange on Monday temporarily suspended trading in the shares of Alpha Bank and Eurobank pending official announcements on a planned merger, which would create Greece's biggest bank.

The news triggered a Greek share rally, with the benchmark General Index on the Athens bourse gaining more than nine percent in early trading. On Friday, it had hit its lowest in nearly 15 years due to concerns over the future of the country's latest rescue package.

The banking sector was up nearly 20 percent, while shares in National Bank of Greece, the country's largest lender, were up 29 percent.



Greece is in the throes of a major financial crisis, and only avoided bankruptcy after two international bailouts agreed over the past two years, worth a combined total of euro219 billion ($315 billion). Central bank and government officials have repeatedly urged bank consolidation, arguing it will afford them greater protection from the fallout of the crisis.

Eurobank and Alpha, Greece's second and third-largest banks, told market authorities that their boards would be meeting later Monday to discuss the merger, as well as a capital boost for the new bank. While rumors of the impending deal broke over the weekend, the private lenders have made no official announcements yet.

A stock exchange announcement said the trading suspension would last until investors learn the outcome of the meetings and the terms of the agreement.

If the deal goes ahead it will create Greece's largest bank by assets ' some euro150 billion ($216 billion) ' with euro80 billion ($115 billion) in deposits. In February, Alpha rejected a takeover bid from National Bank of Greece following exploratory talks, arguing that the proposed terms were not beneficial to its shareholders.


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