At the end of October, Italy’s UniCredit announced a two-part deal with Greek bank Alpha under which it will merge the two lenders’ asset in Romania and buy a 9% stake in Alpha Bank from the Greek state.
For Italy’s second largest bank—after Intesa San Paolo—this is the first deal since veteran banker Andrea Orcel became the CEO in 2021, while the purchase of the stake in Alpha Bank would be, if fully approved by the Greek authorities, the first investment in a Greek lender by another European bank since the financial crisis.
UniCredit is a large player in central and Eastern Europe with presence in Germany, Austria, Poland, Croatia and Romania. It also still owns a lender in Russia.
UniCredit will pay €300mn in cash for Alpha Bank’s Romanian operations, and merge them with its local units. Alpha Bank will keep 9.9% of the new Romanian entity; UniCredit will have the remainder. According to UniCredit, the deal will add euro 100 million in net profit to the Italian bank and will create the third largest lender in Romania.
“For the time being and for the foreseeable future this is the best alliance we could have struck” said Orcel, who according to market analysts has been under pressure for a while to announce a growth deal. He denied a strategy to expand further into the Greek bank. “(It) makes sense to seal this partnership with the acquisition of a significant, but limited, stake in Alpha… that is what it is, no more,” Orcel told analysts on October 22.
A 9% stake in Alpha Bank is worth around euro 270 million based on market prices, analysts said but the offering price to the Hellenic Financial Stability Fund (HFSF) was not disclosed. The purchase will make the Italian lender the largest stakeholder in the Greek bank. UniCredit said that if the offer to the HFSF fails, it will buy up to 5% of Alpha on the market in the next two years. UniCredit also plan to distribute its own asset management products to the 3.5 million clients in the Greek bank.