France's Credit Agricole has agreed to sell its Greek banking unit Emporiki to Alpha Bank for EUR 1.

Credit Agricole has said that its third-quarter net profit will take a hit of EUR 2 B as a result of the sale, which includes a loss on asset sales, a transaction cost of EUR 300 M to EUR 400 M, and the cost of a new recapitalization of Emporiki.

As previously announced, prior to completion of the deal Cr?dit Agricole will increase its recapitalisation of Emporiki to EUR 2.85 B, having already injected EUR 2.3 B in July 2012.

In addition, it will subscribe to EUR 150 M of convertible bonds to be issued by Alpha Bank, redeemable in Alpha Bank shares, subject to conditions and on Cr?dit Agricole's initiative.

Credit Agricole says the transaction forms part of its strategy to "strengthen its financial structure and continued refocusing on its core business in line with its strategic plan."

Alpha Bank recently noted that the transaction would represent a major step in the restructuring of the Greek banking sector with the combined Emporiki and Alpha Bank having a pro forma market share of 19% of Greek deposits and 25% in lending, including leading market shares in mortgages and corporate lending. Pro forma consolidated assets as of 31 March 2012 stood at EUR 78 B.

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