Piraeus Bank to stay private in 7.3 bn-euro capital boost

Piraeus Bank, one of the four main Greek lenders, on Tuesday said it had mustered the necessary funds to remain private with a 7.3-billion-euro ($9.5 billion) recapitalisation drive.

"Given that Piraeus Bank has already agreed on the participation of BCP and Societe Generale in its capital increase, it has ensured the private sector's minimum participation that safeguards the bank's private character," it said in an announcement.

"The bank's private character has been confirmed," head of the Piraeus Banking Group Michalis Sallas told journalists.

On Monday, Piraeus announced that it had acquired the entire share capital of Millenium Bank Greece, and that the bank's parent company, Portuguese bank Millenium BCP, would invest 400 million euros in Piraeus' planned capital increase.

Another 170 million euros came from a deal in December to acquire Geniki Bank from France's Societe Generale, Piraeus said.

All four of Greece's main lenders -- National Bank, Piraeus, Alpha and Eurobank -- are in the process of recapitalisation as part of the terms included in Greece's latest bailout deal.

A sum of 50 billion euros from Greece's EU-IMF rescue loans has been earmarked for the recapitalisation of Greek banks following the heavy losses they suffered by taking part in a writedown of privately-held Greek government bonds last year.

To avoid effective nationalisation, banks are required to raise 10 percent of the total recapitalisation from private investors.

The Hellenic financial stability fund on Monday said the four main banks had already been allocated their share of 27.5 billion euros in prepayments and commitments.

According to the finance ministry, the recapitalisation process must be completed by the end of April.

On Monday, Eurobank said it would no longer seek private funds but would recommend to shareholders a fully state-backed recapitalisation instead.

Even the head of Greece's main union GSEE uncharacteristically expressed concern about the recapitalisation issue on Tuesday.

"We call on every Greek to back this effort from what little they have to save our entire banking system," GSEE head Yiannis Panagopoulos said.

"We are interested in keeping the banks Greek," he told President Carolos Papoulias, adding that the effort should focus on National Bank, the country's oldest and largest lender.