Greek banks to raise cash

City A.M. Reporter
GrEece’s Marfin Popular announced plans yesterday to raise €1.15bn (£1bn), making it the third Greek bank to opt for a cash call to boost capital ratios, while a fourth, Eurobank, said it was looking instead to sell a chunk of its Polish unit.

Big cash calls by National Bank of Greece (NBG) last month and Piraeus Bank last week have fanned talk other Greek lenders would follow suit to strengthen their balance sheets and reduce a dependence on European Central Bank funding.

Hit by the country’s debt crisis, Greek banks were shut out of wholesale funding markets after their bond portfolios were damaged by successive sovereign credit rating downgrades, forcing them to rely on the ECB.

Cyprus-based Marfin Popular also said yesterday it is to convene its board on 11 November to decide on a €1.15bn cash call following the stricter capital requirements of the international Basel III banking rules.

Under the plan Marfin, Popular’s management is proposing a €489m one-for-two rights offer at one euro a share. The price of the existing shares closed down 4.05 per cent at €1.42 on the Athens bourse yesterday, giving the bank a market value of about €1.26bn. Marfin also aims to sell via a placing by the end of next year convertible capital securities to raise up to €660m, with a minimum conversion price to be €1.80.

Last month NBG set the ball rolling when it raised €1.8bn by selling new shares and convertible notes. Greece’s biggest lender is set to reduce its holding in Turkey’s Finansbank for additional proceeds of about €1bn.

Its move was followed by Piraeus Bank which last week launched an €800m rights issue and €250m of convertible bonds, eyeing stronger capital ratios and more financial flexibility.