Piraeus Bank recapitalization

Piraeus Bank of Greece reported on Tuesday that its shareholders had approved a recapitalization deal with a view to safeguarding the financial institution's solvency.

The second-biggest lender in the southern European nation said it was confident it would raise enough money through private sources to avoid being nationalized. It added the adopted plan was worth a total of 7.33 billion euros ($9.56 billion) in shares for private investors.

Under the terms of the country's bailout by international lenders, Greek banks have to raise 10 percent of their total recapitalization needs privately or accept coming under state control.

Keeping afloat

Piraeus Bank Chairman Michael Sallas said a large part of the funds needed had already been pledged. "My feeling is that we'll succeed," he commented, adding that investors abroad had also voiced interest.

The fresh money coming from the sale of shares will go towards consolidating the lender's capital stock after massive write-downs on sovereign bonds and toxic loans.

By contrast, the fourth-biggest lender in Greece, Eurobank, was not able to raise enough private funds for recapitalization. It turned to the domestic stability fund HFSF to get nationalized temporarily. Originally, Eurobank was to merge with the country's National Bank, but international lenders had voiced their misgivings about such a deal.

hg/jr (AP, Reuters)