Credit Agricole intends to support Emporiki Bank in the event of a possible need for new capital, after it has enhanced its Greek subsidiary with about €2b during the last two years.
Specifically, after the capital increases of €850m and €989.4m in May 2009 and March 2010, Credit Agricole has agreed to the payment of additional €750m.
According to sources, the two banks have signed a Capital Advance Agreement in December 2010. Credit has agreed to pay an amount of up to €750m to a special account in Bank of Greece until September 30, 2011. This amount will be used exclusively for capital support of Emporiki in any future capital increase.
Meanwhile, Credit’s intention to support the liquidity of Emporiki is expected to be stated in the annual general meeting of bank’s shareholders on Friday. Note that the Q1 financial results of Emporiki Bank will be announced after the closure of the Athens Stock Exchange on Friday.
Sources note that the results will reflect the continued positive trends of the last quarter of 2010, with a clear increase in operating profits and restraint of losses, while the first quarter of 2011 is expected to remain loss-making because of provisions for the purification of the bank’s loan portfolio.
Under the business plan, the bank will seek to balance the sheet in 2011, in order to report profits of €150m in 2012.
The main objective is the decrease of operating costs. In terms of wage costs, the management is satisfied with the staff reduction through retirements. Since 2007, Emporiki’s staff has been reduced by 2,500 people, while 400 more employees are expected to retire in 2011.
Specifically, after the capital increases of €850m and €989.4m in May 2009 and March 2010, Credit Agricole has agreed to the payment of additional €750m.
According to sources, the two banks have signed a Capital Advance Agreement in December 2010. Credit has agreed to pay an amount of up to €750m to a special account in Bank of Greece until September 30, 2011. This amount will be used exclusively for capital support of Emporiki in any future capital increase.
Meanwhile, Credit’s intention to support the liquidity of Emporiki is expected to be stated in the annual general meeting of bank’s shareholders on Friday. Note that the Q1 financial results of Emporiki Bank will be announced after the closure of the Athens Stock Exchange on Friday.
Sources note that the results will reflect the continued positive trends of the last quarter of 2010, with a clear increase in operating profits and restraint of losses, while the first quarter of 2011 is expected to remain loss-making because of provisions for the purification of the bank’s loan portfolio.
Under the business plan, the bank will seek to balance the sheet in 2011, in order to report profits of €150m in 2012.
The main objective is the decrease of operating costs. In terms of wage costs, the management is satisfied with the staff reduction through retirements. Since 2007, Emporiki’s staff has been reduced by 2,500 people, while 400 more employees are expected to retire in 2011.
