How banks consolidated

The birth of a “fifth pole” with the absorption of Pancreta Bank by Attica Bank is the first significant change in Greece’s banking sector for several years. The merged bank aims at competing on an equal footing with the “big four” banks (Alpha, Eurobank, National and Piraeus).

The past few years may have been relatively quiet in Greece’s banking sector, but this is not representative of the turmoil of the past three decades or so that transformed the country’s banking that once boosted 50 banks of varying sizes. How did we get here?

As part of their expansion strategy that involved boosting both their branch network and their overall business, Eurobank and Piraeus Bank embarked on an aggressive spree of mergers and acquisitions in the 1990s and early 2000s.

Piraeus Bank acquired Macedonia-Thrace Bank, Xiosbank and ETVA, the bank set up in 1964 by the state to promote industrial growth. Piraeus also bought the Greek operations of Credit Lyonnais and NatWest. Not to be left behind, Eurobank merged with 60-year-old Bank of Athens, Bank of Crete, Ergobank (founded in 1975) and Telesis Investments. Several years later, it greatly expanded its network by acquiring TT Hellenic Postbank, which, in turn, had bought the former Aspis Bank in 2011.

In 1999, one of the biggest acquisitions was made when Alpha Bank bought a 51% stake in Ionian Bank, Greece’s oldest (dating from 1839) from Emporiki Bank. In 2013, it was the turn of Emporiki itself to be taken over by Alpha, having previously, and for a few years, become a subsidiary of France’s Credit Agricole. Piraeus Bank became active again in 2012 by absorbing the “healthy” part of Agricultural Bank and Geniki Bank, the latter from France’s Societe Generale. Just a year later, it acquired the Greek operations of Cyprus Bank and Cyprus Popular Bank as well as Hellenic Bank and Millennium Bank.

Aside from some smaller mergers and sales by foreign banks, the big merger that failed to happen, twice, was between Alpha Bank and National Bank.