Still room for consolidation
Greece's banking sector is highly concentrated and most bankers do not see any particular reason why there should be consolidation among the five largest banks when little synergy could be achieved because of rigid labour laws. However, they see room for consolidation among small and medium-size banks. A small minority even feels that another major international bank is likely to enter the market in the next year or so.
Greece's five largest banks, National Bank of Greece, Alpha Bank, EFG Eurobank Ergasias, Emporiki Bank and Piraeus Bank, account for more than 80% of total deposits and loans. A few smaller domestic and foreign banks account for the rest. Citibank, HSBC and Société Générale have a presence and Crédit Agricole has a stake in Emporiki Bank.
"I believe that the existing labour market legislation makes an M&A deal among large banks difficult. Nevertheless, if one large bank makes a move, then it may cause a chain reaction and others will follow," says Yiannis Pehlivanidis, deputy CEO at National Bank of Greece, the country's largest bank.
Pension fund pressures
To bypass labour law rigidities, the country's four largest banks have adopted voluntary retirement programmes to cut costs.