Alpha Bank to pull out of Eurobank EFG merger plan

Greece's Alpha Bank will propose pulling out of a planned merger with Eurobank because of the impact of the country's bond swap deal on the banks, the lender said on Wednesday.

On November 15, the shareholders of both banks approved the merger of the two lenders to create the country's largest bank which would be able to better cope with the debt crisis, which has caused deposit outflows and rising bad loans.

But the debt swap deal between Greece and its private sector creditors, which was completed last week, caused much bigger losses to banks than expected when the merger was originally agreed.

"Alpha Bank's board will call a general shareholders' assembly where it will propose the revocation of the merger decision that shareholders took on November 15," a spokesman at the bank said.

Both Alpha Bank and Eurobank EFG operate in Serbia.