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National Bank-Alpha Merger Details

21/11/2001 09:56
Following the announcement on 1 November 2001, the National Bank of Greece S.A. and Alpha Bank A.E. announced yesterday further details of the proposed merger whereby an exchange ratio of 7 new National Bank of Greece shares for every 9 Alpha Bank shares has been decided. The above mentioned exchange ratio implies a relative ownership of approximately 61.3% and 38.7% in the merged entity by National Bank of Greece and Alpha Bank shareholders, respectively.
The merger will allow the Group to gain scale and size to compete in an increasingly competitive international and, particularly, European market, will combine complementary businesses and increase its presence. The Bank will also be the largest company on the Athens Stock Exchange as well as one of Europe’s top 25 banks by market capitalisation. Increased international investor interest will be attracted by the Group’s opportunities and the robust expected growth of the Greek financial services market.
In total, cost synergies are expected to generate by 2005 annual pre-tax cost savings arising from the merger totalling approximately € 200 million. It is expected that 25% of these cost savings will be achieved in 2002, 60% in 2003, 90% in 2004, with the full cost savings being achieved in 2005. These figures take no account of any additional benefits from merger tax relief in accordance with the Government’s proposed fiscal reforms
Revenue enhancements are expected to generate by 2005 net annual gains before tax of approximately € 85 million. It is expected that 5% of these benefits will be achieved in 2002, 60% in 2003, 90% in 2004 with the full revenue enhancements being achieved in 2005.
It is expected that the enlarged Group’s two branch networks will continue to operate in parallel until the end of 2002. By that time, the management of the Group will have had the opportunity to carefully analyse the contribution and importance of each of the branches within the two Banks’ networks. The process of branch network restructuring and rebranding is expected to have been completed by the middle of 2003. It is currently estimated that the one-off total cash cost of implementing the integration of the two Banks will be approximately € 220 million and will have been incurred by 2004
The merged entity will have a complementary international network of operations, with substantial presence in Cyprus, Bulgaria, F.Y.R. of Macedonia, Romania, Albania as well as London and New York and smaller units in France, Germany, Canada, South Africa, Egypt, Turkey and elsewhere. In total, the combined Group will have a presence in 18 countries, with approximately 374 units and more than 6,730 employees outside of Greece.
Respecting history and a tradition of 160 years, the new Bank will operate under the corporate name “National Bank Of Greece S.A.” and the trade name “National Bank”. At this moment when the drachma is being replaced by the Euro, the corporate identity of the new Bank will maintain Alpha Bank’s symbol which refers to the original drachma minted in the fifth century B.C., on the island of Aegina and the Greek colours of blue and white.