Business

Greek banks postpone merger

ATHENS — Greek banks NBG and Eurobank on Monday said their planned merger has been postponed, causing huge volatility in their share price amid fears they may be nationalized.

National Bank of Greece and Eurobank saw their stock plunge 30 percent — the maximum drop allowed in a session — earlier in the day. But NBG ended the session limiting losses to 10 percent, while Eurobank staged an astonishing rebound to close up 23.3 percent.

Advertisement

The two lenders announced that the merger process had been ‘‘suspended’’ as they have to first raise money in a nationwide program meant to strengthen the country’s financial system.

NBG needs $12.63 billion and Eurobank needs $7.56 billion to meet solvency criteria set by the central bank.

Since the banks cannot raise any of the money themselves, the Hellenic Financial Stability Fund, Greece’s bailout facility for the banks, will have to provide it for them. In that event, the fund would essentially take control of the banks.

Associated Press

Loading comments...