Greek bank avoids need for state takeover

NBG is the second major Greek lender to successfully recapitalise without falling under the full control of the Hellenic Financial Stability Fund, a vehicle to rescue Greek banks under the EU/IMF bailout plan.

Detailing the results of a rights issue that ended on Thursday, NBG said it raised 10.8 percent of the funds needed to plug a E9.65bn capital shortfall, with about half coming from foreign investors.

Greece’s four biggest banks, including NBG, need E27.5bn to restore their solvency after losses on sovereign debt writedowns and bad loans.

Under the recapitalisation plan that Athens agreed with its international lenders, at least 10 percent of new equity issues by its four big banks must be bought by the market for them to remain in private hands.

Meeting the minimum threshold means NBG will not need to resort to issuing costly contingent convertible bonds (CoCos).

The remaining funds to plug the capital shortfall will be provided by the HFSF rescue fund in exchange for shares.

Last month, Alpha Bank raised 12 percent of its capital requirement from the market, retaining management control.

Piraeus Bank, which is carrying out a rights issue, is also expected to meet the threshold to stay in private hands.

It leaves only Eurobank as opting to be fully recapitalised by the HFSF.