Stalled bank merger hits Greek stocks

Stock in 2 Greek banks plunges after merger is stalled, nationalization looms

Associated Press
Greek bank stocks plunge after merger stalled
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Greek Finance Minister Yannis Stournaras waves to reporters as he arrives at Maximos' Mansion to meet with Greek Prime Minister Antonis Samaras and the debt inspectors from the European Central Bank, European Commission and International Monetary Fund, known as the troika in Athens on Sunday, April 7, 2013. (AP Photo/Kostas Tsironis)

ATHENS, Greece (AP) -- Greek banks NBG and Eurobank are seeing their stock plunge 30 percent — the maximum allowed in a day — after news that their planned merger has been postponed.

National Bank of Greece and Eurobank on Monday announced that the merger process had been "suspended" as the two banks have to first complete participation in a program meant to strengthen the country's financial system. Both have said they are unable to raise the cash required by the program, suggesting they may face nationalization.

NBG needs 9.76 billion euros ($12.63 billion) and Eurobank needs 5.84 billion euros ($7.56 billion) in total to meet solvency criteria set by the central bank.

The drop in the banks' stock caused the main Greek stock index in Athens to trade 2.8 percent lower.

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