July 17 (SeeNews) - Bulgaria’s Postbank, a unit of Greece’s Eurobank EFG, signed on Friday a memorandum of understanding for the acquisition of Alpha Bank’s Branch in Bulgaria, the two banks said in a joint statement.
"The proposed transaction is fully aligned with Alpha Bank’s restructuring plan, as approved by the European Commission in 2014, and its commitment to focus its operations only on its core markets," the two banks said in a statement published on Postbank's website.
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"It also serves ideally Postbank’s strategy to expand its operations and further enhance its presence in the Bulgarian market as one of the most stable and sustainable financial institutions with assets of more than 3.2 billion euro ($3.47 billion)," the statement added.
The deal covers the entire banking operations of the Alpha Bank Branch, which consists of deposits worth 254 million euro and gross loans worth 410 million euro.
It is expected to be completed by the end of the year following the execution of definitive transaction documentation and the obtaining of all approvals required to complete the proposed transaction in Bulgaria, Greece and from the relevant bodies in the European Commission.
The deal will strengthen Postbank's market position in the Bulgarian banking sector and expand its customer base in both the retail and corporate business banking segments, the statement added.
Following the completion of the acquisition, Postbank will become the fourth largest bank in Bulgaria ranked by deposits and loans. Its network will consist of more than 200 locations thoughout Bulgaria.
"The proposed transaction is expected to contribute positively to Postbank’s pre-provision income from the second year of combined operations and significantly improve its coverage ratios, while it maintains its strong capital ratios above 20% and substantial liquidity buffers well above the regulatory requirements," the banks also said.
$=0.9222 euro