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Greek banks to merge in three-way deal

Athens - Three Greek banks including the country's fifth-biggest lender Piraeus Bank were to announce merger plans on Thursday, news reports said.

Piraeus Bank was to table a bid for the majority state-owned Agricultural Bank and for Hellenic Postbank in which the state also controls a stake, the reports said

Piraeus Bank chairman Michalis Sallas is to hold a press conference later on Thursday where he will announce the bid, To Vima daily said.

The listing of all three banks was temporarily suspended on the Athens stock exchange (ATHEX).

ATHEX chairperson Spyros Capralos "decided to temporarily suspend the trading of the shares of Piraeus Bank, Agricultural Bank and Hellenic Postbank as the former bank informed the Hellenic Capital Market Commission that it submitted a proposal to the Greek government for the acquisition of significant shareholdings in the two latter banks," a stock exchange statement said.

"Piraeus Bank ensured the Hellenic Capital Market Commission that it will release relevant announcements during the day.

"The trading of the companies' shares will be resumed after the release of the relevant announcements," it added.

The government had in recent weeks repeatedly encouraged the Greek bank sector to consolidate to help support the ailing economy, which is caught in a deepening recession as the country battles an unprecedented debt crisis.

Piraeus Bank's net profits plummeted 87% in the first quarter compared to the equivalent period last year, standing at €7m.

It has 359 branches in Greece and 517 abroad.

Both Agricultural Band and Hellenic Postbank have posted losses this year.

Agricultural Bank, which owns 505 branches in Greece and one in Germany posted a net loss of €37.6m in the first quarter.

Hellenic Postbank, which operates 145 branches nationwide, in March had net losses of €25.4m.

The Greek state has a 77% stake in Agricultural Bank and controls a third of Hellenic Postbank according to finance ministry figures.

  - AFP

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