The Canadian Press - ONLINE EDITION
Posted: 04/8/2013 4:23 AM | Comments: 0
Last Modified: 04/8/2013 10:52 AM
ATHENS, Greece - Greek banks NBG and Eurobank on Monday said their planned merger has been postponed, causing huge volatility in their share price amid fears they may be nationalized.
National Bank of Greece and Eurobank saw their stock plunge 30 per cent — the maximum drop allowed in a session — earlier in the day. But NBG ended the session limiting losses to 10 per cent, while Eurobank staged an astonishing rebound to close up 23.3 per cent.
The two lenders announced that the merger process had been "suspended" as they have to first raise money in a nation-wide program meant to strengthen the country's financial system. Both have said they are unable to raise the cash, suggesting they may face nationalization.
NBG needs 9.76 billion euros ($12.63 billion) and Eurobank needs 5.84 billion euros ($7.56 billion) in total to meet solvency criteria set by the central bank.
Since the banks cannot raise any of the money themselves, the Hellenic Financial Stability Fund, Greece's bailout facility for the banks, will have to provide it for them. In that event, the fund would essentially take control of the banks, a prospect that has spooked some shareholders.
"The Hellenic Financial Stability Fund has stepped in and will decide after the end of this month what will happen with the merger of the two banks," government spokesman Simos Kedikoglou told private Antenna television.
The main Greek stock index in Athens closed 0.7 per cent higher, with banking shares sliding an average of 3 per cent.
The governing boards of the NBG and Eurobank were to hold meetings Tuesday.
Have you found an error, or know of something we’ve missed in one of our stories? Please use the form below and let us know.
Having problems with the form?Contact Us Directly
Jets trying to regroup for Game 3 in Winnipeg after losses in Anaheim
Five takeaways from Saturday's playoff game
Bombers' mini-camp roster revealed as training kicks off in sunny Florida
TOP 5: All time best kisses
Manitoba Liberals gear up for 2016; unveil a new website ahead of campaign
After warm week, rain and winds in store for Winnipeg today
Another killer comeback: Ducks sink Jets with third-period surge
Nearly 3,400 hydro customers without power in St. Vital and Southdale
Five things to watch for in Canadian business
Police make arrests in connection with stabbings on Saturday night
Canadian miners in Mexico deal with security risks
Winnipeg police release the name of the man who died after being stabbed on Friday
Stanley Cup Playoffs game 2, Jets vs. Ducks, April 18, 2015