Last Tuesday, a senior bank executive informed Reuters that Greece's Piraeus Bank intended to plug a Euro 7.33 billion capital hole. The bank would raise higher than 19.5% of the funds it required. Through rights offering with private investors, it would be able to augment 10% to its common equity matters.
Piraeus was the third-largest Greek lender, next to Alpha and National Bank. It would succeed in raising funds because it made the recapitalization project a necessity. Banks would stay privately run with the said program.
Piraeus's official who refused to be identified said, "Private sector take-up will be more than 19.5 percent, near 20 percent." By meeting the lowest threshold, Piraeus would not end up distributing costly contingent convertible bonds or CoCos.
The creditworthiness of four largest banks in Greece require Euro 27.5 billion or US($36.01 billion. The money was essential after the shortfall on debt writedowns and bad loans.
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