Andrea Orcel’s Greek foray promises handsome gifts

Alpha Bank SA

29/08/2025 11:43

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

By Neil Unmack

LONDON, Aug 29 (Reuters Breakingviews) - Sometimes a simpler deal is best. UniCredit CRDI.MI boss Andrea Orcel made moves to merge with rivals in his key markets of Italy and Germany, but met opposition from national governments. Yet a 26% stake in smaller Greek lender Alpha Bank ACBr.AT is both lucrative and less controversial. A full takeover looks possible.

UniCredit’s interest in Greece’s fourth-biggest bank predates its now-aborted hostile raid on Banco BPM BAMI.MI, and controversial stake-building in Commerzbank CBKG.DE. The Italian deal was effectively blocked by the government’s takeover conditions, while German Chancellor Friedrich Merz has hardly rolled out the red carpet for Orcel. Yet a 2023 Greek deal and partnership, in which UniCredit bought Athens’s Alpha stake and merged the pair’s Romanian businesses, is purring along happily.

UniCredit has now raised its holding to 26%, of which more than half is still held in the form of derivatives. Its share of Alpha’s earnings imply a return on investment of around 20%, UniCredit reckons, helped probably by the fact that it bought an initial near-10% stake when Alpha’s stock was much cheaper. And that return is before factoring in a host of revenue boosters: Alpha is a big distributor of UniCredit’s fund products in Greece, and the Italian group is helping to offer trade finance, currency and investment banking services to Greek companies.

Could Orcel go further? The collaboration means he is already getting many of the benefits of a takeover, reducing the need for a deal. Still, Alpha looks attractive. Whereas many banks in Europe are now trading at a premium to book value, the Greek lender’s multiple implies a modest discount, despite its return on tangible equity this year of nearly 13%, using 2025 analysts’ forecasts gathered by Visible Alpha.

The numbers could work for a full deal. Assuming a cost of around 1.2 billion euros for its existing 26% stake, snapping up the remaining 74% of Alpha at the current price would imply a total outlay of roughly 7.1 billion euros. Factor in cost savings, of perhaps 150 million euros, and the post-tax return would exceed 1.1 billion euros in 2027, using LSEG analysts forecasts, roughly in line with Orcel’s 15% M&A hurdle. That calculation assumes integration costs of 300 million euros.

A deal might also be less tricky than Orcel’s BPM and Commerzbank attempts. The government has welcomed UniCredit’s investment in the country. And since Greece has three bigger banks, it would have no reason to fear excessive foreign control. UniCredit’s stake and relationship with Alpha would make it hard for a rival lender to launch a counterbid. That all means Orcel is in a relatively good position, with or without a deal.

Follow @Unmack1 on X

CONTEXT NEWS

UniCredit on August 28 said that it had increased its stake in Greek lender Alpha Bank to 26%, through “additional financial instruments.”

UniCredit said that its total stake in Alpha would generate a return on investment of around 20%, assuming a share in earnings of 244 million euros. It is requesting authorisation from regulators to convert a portion of that stake from derivatives into physical shares, and to consolidate its share of Alpha’s net income.

Alpha Bank shares fell modestly in early trading on August 29.

Alpha Bank’s valuation has soared since UniCredit first took a stake https://www.reuters.com/graphics/BRV-BRV/zjpqoddjgpx/chart.png

(Editing by Liam Proud; Production by Shrabani Chakraborty)

((For previous columns by the author, Reuters customers can click on UNMACK/neil.unmack@thomsonreuters.com))