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Greece's NBG bank needs 785 mn euros in private funds

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(Globalpost/GlobalPost)

The National Bank of Greece (NBG), the country's top lender, said Wednesday it needs to raise at least 785 million euros in capital from private investors to keep from falling under state control.

In order to avoid an effective nationalisation when lenders are recapitalised using funds from the country's EU-IMF bailout, Greek lenders are required to raise 10 percent of the amount needed from private investors.

A shareholders meeting will be held on April 19 to decide on the recapitalisation of between 7.85 billion and 9.75 billion euros.

There have been concerns that NBG won't be able to raise the necessary funds, which would push it into the hands of the Hellenic Financial Stability Fund (HFSF) with is responsible for cleaning up the banking sector and is working closely with the EU, IMF and European Central Bank.

Greek authorities over the weekend froze a merger between NBG and Eurobank until the recapitalisation process is complete.

A source close to the recapitalisation process told AFP on Monday that the two banks were likely to fall under state control, while the other two major banks, Alpha and Piraeus, would probably succeed in raising the needed funds and remain in private hands.

Greek banks were hit hard by the writedown last year on Greek government bonds that the EU, IMF and ECB insisted upon as a condition for bailout help.

However they earmarked 50 billion euros to recapitalise Greek banks, and the process should be completed by the end of April for the country to continue to receive bailout loans.

Officials from the EU, IMF and ECB are currently conducting an audit in Athens that will determine whether Greece will receive 2.8 billion euros in loans that have been pending since last month.

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National Bank of Greece

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http://www.globalpost.com/dispatch/news/afp/130410/greeces-nbg-bank-needs-785-mn-euros-private-funds