International credit rating firm, Fitch Rating, sees positively the three-way merger of Marfin Financial Group, Laiki Group and Egnatia Bank. In its latest report, Fitch “changed the Rating Watch on Greece-based Egnatia Bank's ("Egnatia") Issuer Default 'BBB-' (BBB minus), and Short-term 'F3' to Positive ("RWP") from Evolving. The Support '5' rating is placed on RWP. This follows Cyprus Popular Bank's ("CPB") public bids to acquire Egnatia and Greece's Marfin Financial Group ("MFG") and the publication of further details on the three-way merger involving the two Greek banks and CPB's Greek subsidiary, Laiki Bank (Hellas) ("Laiki")”, the report said.

According to Fitch, “the acquisitions, which are subject to regulatory and shareholders approval, are expected to be completed by end-2006, upon which the Rating Watch will be resolved”.

“In Fitch's view, there is a high probability that the merger will go ahead to plan, although from an operational point of view this is expected to be finished by mid-2007”, the analysts Christina Tollera and Paolo Fioretti said.

According to the analysts, “the new Greek bank will be roughly double Egnatia's current size and will have total assets of around EUR8 billion, total equity of EUR1.1bn and a domestic network of around 140 branches. It will have a domestic market share in deposits of about 3.6% and loans of around 3.3%”.

“The resulting CBP group will be the largest bank in Cyprus and the sixth largest bank in Greece by assets, with expected total assets of around EUR22bn, equity of EUR3.3bn, loans of EUR18bn, deposits of EUR16bn and a total capital ratio of around 17%”, the report concluded.