ATHENS--Greece's flagship lender, National Bank of Greece SA,
said Friday it had successfully raised EUR2.5 billion ($3.5
billion) from private investors--the fourth and latest Greek bank
to tap the equity markets for a capital increase--signaling a
renewed confidence in the country's banking system.
In a statement, the bank said that the offer had been
significantly oversubscribed, "confirming the strong interest of
institutional investors in NBG." It gave no details of the
investors, but bank officials said major foreign funds--including
Fidelity, Pacific Investment Management Co. and York Capital--were
among the buyers of the stock.
The move by NBG follows similar capital increases by rivals
Eurobank Ergasias SA, Piraeus Bank SA and Alpha Bank AS, who have
all turned to the private market in recent weeks to shore up their
battered balance sheets.
Greece's banks have been hit hard by the country's six-year
recession, a steep decline in local property prices, deposit
outflows and an unprecedented EUR200 billion sovereign-debt
restructuring in early 2012.
Last year, the four big banks 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. In March this year, Greece's central bank
said the four lenders would need to raise another EUR5.8 billion to
cope with that mountain of bad debt.
By selling the new shares exclusively to private investors, the
banks have also watered down the giant stake held in them by the
Greek government that it was given as a quid pro quo for last
year's loan. Following the capital increase, the government's stake
in NBG has now fallen to just 57% from 84% before.
Increased investor appetite for Greek banks comes as the
sector's prospects recover despite the country's continuing
economic problems.
Earlier this month, Moody's upgraded its outlook on Greece's
banking system to stable from negative amid expectations that the
country's economy would return to growth this year and next.
For this year, Greece and its international creditors expect the
economy to expand by 0.6%, marking its first growth since 2007.
Write to Alkman Granitsas at alkman.granitsas@wsj.com
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