Crédit Agricole Leasing and Factoring has kept Greek subsidiary Emporiki Leasing, despite its parent bank selling Emporiki bank to Athens-based Alpha Bank for the token sum of 1.
Emporiki Leasing recorded 142m in impairment losses in 2011 while Emporiki Bank recorded a net loss of 352m in the fourth quarter alone, according the Crédit Agricole financial report for last year.
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Prior to the completion of the sale in December, Crédit Agricole will have to complete its 2.85bn recapitalisation of Emporiki, which started with a 2.3bn injection in July. It will also subscribe to 150m of convertible bonds to be issued by Alpha Bank and redeemable in Alpha Bank shares.
The financial impact of the deal will be recognised in Crédit Agricole’s statement for Q3 2012, with an estimated 2bn drop in net income, although the group believes the transaction will assist it in reaching its solvency targets for year-end 2013.
Alpha Bank said the transaction represents a major step in the restructuring of the Greek banking sector as the combined Emporiki and Alpha Bank will have a market share of 19% of Greek deposits and 25% in lending, including leading market shares in mortgages and corporate lending.
Clifford Chance and Koutalidis acted as legal advisers on the deal.
