UniCredit invests in Alpha

Italian group UniCredit is proceeding to establish a strategic partnership with Alpha Bank, submitting a proposal to acquire the 9% stake held by bank rescue fund HFSF in the lender.

The agreement comes with the Italian bank’s pledge to buy a minimum of 5% of Alpha’s share capital over 24 months, if the HFSF does not accept the proposal. It also includes the acquisition of 90.1% of Alpha’s subsidiary in Romania and the merger of their activities in the Romanian market, as well as the acquisition of 51% of Alpha Life, Alpha’s Greek insurance arm, and commercial cooperation between the two parties in Greece in portfolio management products.

This is the first investment by a strategic partner in Greek banking in 17 years, which an Alpha statement said “signals the country’s return to normality while being a vote of confidence in Alpha Bank.”

The acquisition proposal was submitted late on Sunday to the HFSF management, which in a statement on Monday welcomed the strategic agreement between Alpha and UniCredit, “applauding” the “merger of their operations in Romania and the strategic cooperation in Greece.”

The proposal was submitted shortly after the upgrade of the Greek economy by S&P, but according to information it had been conceived in the summer with contacts with the Alpha management and sealed during the recent meeting between PM Kyriakos Mitsotakis and UniCredit CEO Andrea Orcel last week. As Alpha’s CEO Vassilis Psaltis noted in his statement, “its acceptance leads to the complete privatization of the bank, making Alpha the only bank in Greece with a primary strategic investor in its capital.”

Economy and Finance Minister Kostis Hatzidakis “welcomed UniCredit’s decision to invest in Alpha Bank,” pointing out that the investment by a major European bank in the Greek banking system after so many years is proof that both the Greek banking sector as well as the Greek economy have entered a path of progress and growth.”

Central banker Yannis Stournaras also welcomed the deal, noting that it “reflects the significant progress of the Greek financial system.”