Three international firms to assess three-way merger
12/7/2006 14:30
The three firms that have been selected to evaluate Laiki Bank (Hellas), Marfin and Egnatia will work hard in the next few days, however, the complexity of the three-way merger has aroused strong feelings to the international analysts, who changed the outlook of Egnatia Bank to negative. The analysts are highly concerned about the final formation of the merger and the stake that each bank will hold in it.
The merger concerns the absorbance of Marfin Bank and Laiki Bank (Hellas) by Egnatia Bank. Despite the fact the assessment has not been carried out yet, the international credit rating firm, Fitch, said that Marfin Financial Group, which holds 10% of Laiki Group and 100% of Egnatia, is expected to be the major shareholder.
So far, the firms have not revealed the way that the three banks will be assessed, however, the statements of Laiki Group Chairman, Kikis Lazarides for a 40% of the new group might be an indication of the expectations of part of shareholders.
According to sources, the size of the new group will be double than that of Egnatia Bank with total assets of €8.5 billion, equity of €1.1 billion and domestic network of 140 branches. “It will have a market share in deposits of about 4%, loans of around 3%”, Fitch noted.
A complicated merger
In its report released on Tuesday, the international firm referred to the “complexity of the merger”.
According to Director in Fitch’s Financial Institution Group, Cristina Torella, “While Fitch appreciates that the merger would considerably improve Egnatia’s size and hence standing in an increasingly competitive market, the relative complexity of the merger exposes the bank to execution and strategic risk, which areb both difficult to assess at the current time”.
Fitch will be in the position to give further details once specific details on the merger, the exact shareholders structure and a detailed business plan become available. The Support rating could be upgraded at a later stage.
A stake of 31.5% of Marfin Financial Group is controlled by Dubai Financial and 6.75% by the Managing Director, Andreas Vgenopoulos.
Laiki (Hellas) has 55 branches and employs 887 employees. In the first half of 2006, it showed profits of £1.5 million, despite the increase in revenues by 16% mostly due to the problems in its loan portfolio.
As for the economic sizes, the loan portfolio of Laiki Hellas stood at £1.4 billion in March 2006 (annual increase of 21.3%), while deposits reached £1.4 billion (+14.4%).
The merger concerns the absorbance of Marfin Bank and Laiki Bank (Hellas) by Egnatia Bank. Despite the fact the assessment has not been carried out yet, the international credit rating firm, Fitch, said that Marfin Financial Group, which holds 10% of Laiki Group and 100% of Egnatia, is expected to be the major shareholder.
So far, the firms have not revealed the way that the three banks will be assessed, however, the statements of Laiki Group Chairman, Kikis Lazarides for a 40% of the new group might be an indication of the expectations of part of shareholders.
According to sources, the size of the new group will be double than that of Egnatia Bank with total assets of €8.5 billion, equity of €1.1 billion and domestic network of 140 branches. “It will have a market share in deposits of about 4%, loans of around 3%”, Fitch noted.
A complicated merger
In its report released on Tuesday, the international firm referred to the “complexity of the merger”.
According to Director in Fitch’s Financial Institution Group, Cristina Torella, “While Fitch appreciates that the merger would considerably improve Egnatia’s size and hence standing in an increasingly competitive market, the relative complexity of the merger exposes the bank to execution and strategic risk, which areb both difficult to assess at the current time”.
Fitch will be in the position to give further details once specific details on the merger, the exact shareholders structure and a detailed business plan become available. The Support rating could be upgraded at a later stage.
A stake of 31.5% of Marfin Financial Group is controlled by Dubai Financial and 6.75% by the Managing Director, Andreas Vgenopoulos.
Laiki (Hellas) has 55 branches and employs 887 employees. In the first half of 2006, it showed profits of £1.5 million, despite the increase in revenues by 16% mostly due to the problems in its loan portfolio.
As for the economic sizes, the loan portfolio of Laiki Hellas stood at £1.4 billion in March 2006 (annual increase of 21.3%), while deposits reached £1.4 billion (+14.4%).
3287.99
1275.09
