ATHENS-- Piraeus Bank SA said Wednesday it had completed a
EUR1.75 billion share capital increase, the second by a Greek bank
this week, signaling a growing confidence by foreign investors in
the nation's banking sector.
The announcement by Piraeus, Greece's largest domestic lender by
assets, comes just a day after smaller rival Alpha Bank AE
announced the completion of a separate EUR1.2 billion capital
increase following a successful placing of its shares with foreign
investors.
"We would like to thank the international investment community
for its great response and its trust towards the prospects of
Piraeus Bank, the Greek banking sector and the Greek economy,"
Piraeus Bank Chairman Michalis Sallas said in a news release. "We
would like to congratulate Alpha Bank for its big success in the
share capital increase process. We believe that both capital raises
are of historical importance for the Greek banking market and will
contribute significantly to the recovery effort of the Greek
economy."
Greece's banks have been battered heavily by the country's
six-year recession, a steep decline in Greek property prices and an
unprecedented EUR200 billion sovereign-debt restructuring in early
2012.
Last year, Greek lenders were recapitalized with the help of a
European Union loan, but together they still hold some EUR70
billion in bad loans, a sum equal to a third of Greece's annual
gross domestic product.
Although those bad loans continue to rise and aren't expected to
peak until late this year, efforts by Greek lenders to raise fresh
funds appear to be paying off. Last week, Piraeus Bank raised half
a billion euros via a bond issue, the first bond issued by a Greek
bank since the country's debt crisis erupted at the end of
2009.
In a bid to shore up their fragile balance sheets and cope with
the mountain of bad loans, Greece's central bank told Piraeus and
Alpha Bank earlier this month that they need to raise EUR425
million and EUR262 million, respectively. The country's four big
lenders--which includes Piraeus and Alpha, as well as National Bank
of Greece SA and Eurobank Ergasias SA--need to cover a total
capital shortfall of EUR5.8 billion.
Eurobank, now under state control, faces the biggest
shortfall--requiring EUR2.9 billion. It has announced plans to move
ahead with a EUR3 billion share capital increase to cover its
needs. NBG, which needs to plug a EUR2.2 billion hole in its
balance sheet, says it can raise the money without selling more
shares.
In its statement, Piraeus said it had placed roughly a billion
new ordinary shares at EUR1.70 each, a discount of 10% to its
closing price Wednesday. A shareholders' meeting will be held
Friday to formally approve the equity offering.
On Tuesday, Alpha Bank said it had placed its shares at EUR0.65
each, a discount of 7% to Monday's closing price. Alpha has also
called a shareholders' meeting Friday to formally sign off on the
capital increase.
"The degree of participation, and the relatively small
discounts, suggest a strong vote of confidence for the prospects of
the Greek economy and the banking sector," said Panagiotis Kladis,
analyst at NBG Securities.
Write to Stelios Bouras at stelios.bouras@wsj.com
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