Greek Premier in Favor of Cross-Border Bank Takeovers

(Bloomberg) -- Greek Prime Minister Kyriakos Mitsotakis said he’s in favor of cross-border bank consolidation in Europe and welcomes the investment by Italy’s UniCredit SpA in Alpha Bank SA.

“If we really mean what we say about creating scale in banking union we should be open to these types of transactions,” Mitsotakis said in an interview with Bloomberg News Editor-in-Chief John Micklethwait Friday. “In principle we’re in favor of these transactions and I’m happy that UniCredit has decided to look at one of our banks and take a significant stake.”

He didn’t say whether he would back a full takeover of Alpha Bank, after UniCredit recently raised its holding to around 26%, worth about €2.1 billion as of Friday.

Greece has been leading a broader move by European governments to return bailed-out lenders to private ownership, and unlike some countries has welcomed foreign investors taking large stakes. Bank of Greece Governor Yannis Stournaras told Bloomberg earlier this month that he was in favor of more cross-border transactions and hoped such deals would prevail elsewhere too.

“We’re taking a very pro-European view, which helps to implement banking union and capital markets union,” Stournaras said. “We’re in favor of cross-border transactions and I hope that this will prevail elsewhere.” 

The Greek financial industry has been recovering from the country’s debt crisis over a decade ago that claimed around a quarter of its output. The Mediterranean country has regained investment grade ratings, allowing similar developments to take place at the country’s lenders. In little over a year, Greece exited from three big lenders and largely divested from a fourth.

By contrast, the German and Italian governments have been opposed to UniCredit’s pursuit of Commerzbank AG and Banco BPM SpA, respectively, with UniCredit since dropping the Banco BPM bid. Some Italian officials in private are also skeptical of the proposed asset management tie-up between the country’s largest insurer, Assicurazioni Generali SpA, and France’s BPCE SA, people familiar with the matter have said.

Banks in Greece have also started making acquisitions abroad, most notably in Cyprus. This year Eurobank SA fully acquired Cyprus’ Hellenic Bank, while Alpha Bank is in the process of taking over Astrobank, another Cyprus-based lender.

As Greece continues its recovery, Mitsotakis’s government has focused on attracting foreign investment and repeatedly stressed the country’s improved fiscal position. 

“We have been producing significant primary surpluses and I think it’s quite possible that we will have a real surplus again this year. This is a foundation of our economic policy,” Mitsotakis said.

(Updates with comments from second paragraph.)

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