Piraeus Bank, Greece's fourth-largest lender, plans to issue new shares to raise about 800 million euros ($1.1 billion), a banking source with knowledge of the matter told Reuters on Friday. "The bank will seek to raise 800 million euros through a rights issue. An announcement is likely on Friday," the source said.
Piraeus will be the second Greek lender to opt for a big capital boost to strengthen its balance sheet, seeking to regain access to interbank funding.National Bank, Greece's biggest lender, raised 1.8 billion euros earlier in October, boosting its capital adequacy ratios.
Greek banks, hit by the country's debt crisis, have been shut out from wholesale funding markets as their bond portfolios were damaged by successive sovereign credit rating downgrades, forcing them to rely on the ECB. Piraeus, which is advised by Goldman Sachs, Merrill Lynch and UBS UBS.VX, last month withdrew an offer to buy government stakes in ATEbank and Hellenic Postbank for 701 million euros in cash, saying the government was taking too long to make up its mind.
The move would have entailed raising cash. The rights issue will also better position Piraeus in view of anticipated consolidation in the sector. The government and the central bank have called on Greek banks to rethink strategy and consider forming stronger groups to cope with the effects of the country's debt crisis, fanning speculation that mergers and acquisitions will reshape the banking landscape.
News source: Reuters.com link: article
No comments:
Post a Comment