The largest lender in Greece, the National Bank, is aiming to sell at least 12% of its Eur9.75 billion share offering in private placements. This is above the predefined levels set by regulatory authorities to keep the company in private hands.
According to an official, the four major Greek banks, such as NBG, is required to raise Eur27.5 billion in new capital in order to return their solvency ratios to levels required by the Greek Central Bank. This comes after the banks had incurred losses from bad loans and debt writedowns.
Most of the funds would be coming from a state supported bank fund called the Hellenic Financial Stability Fund and the fund would issue contingent convertible funds or CoCos for the infused capital.
Under the recapitalization plan agreed with the country's international creditors, there is a required 10% of new common equity for the banks are to be raised from private sector sources in order to keep them in private hands.
The official said, "Interest has been expressed by shareholders and non-shareholders to take part in the rights offering. Raising the goal to 12 percent allows for more private investor participation."
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