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The National Bank of Greece collected 1 billion euro for its capital increase

09 June 2013 / 16:06:52  GRReporter
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The positive expectations for the successful recapitalisation of the National Bank have been confirmed. According to information, the group has managed to raise capital that covers 10% of private participation, i.e. 1 billion euro. The next goal is 12% private participation, so that no CoCos will be issued in the future. Sources from banking circles and stock markets mentioned that the main part of the capital came from businessmen who had expressed in advance their wish to participate, and later bound their capital with a contract. The support of the Latsis family is also strong – their participation amounts to 150 million euro.

It is noted that the National Bank aims at the acquisition of 1.17 billion euro of private capital based on market evaluations before the start of the exercise of rights in the capital increase participation. So far, the bank has managed to gain more than 800 million euro from more than 350 businessmen by referring corresponding capitals to a special account. This amount is the smallest part, so that the bank can remain private, but the aim of the management is to move ahead, so that there is no need to issue CoCos and it seems that this goal will be achieved, too. According to Alexandros Tourkolyas, Executive Director of the bank, the successful completion of the recapitalisation will allow the National Bank to enhance its capacity to participate in the development of both the Greek economy and the regional market.

The rights

Yesterday, negotiations for the rights of preference ended, and the process of exercising the rights will end on 13 June. According to the terms of the recapitalisation, old shareholders have a right of preference to participate and can receive 2.2253392 new shares for each old one, at a price of 4.29 euro.

Yesterday, at the end of the meeting, the cost of this right reached almost zero - a fact that is associated with the existing offer, since a large percentage of minority shareholders could not participate in the recapitalisation. Yesterday, shares of the National Bank were also under pressure and, generally, suffered losses throughout the week, since a lot of shareholders sold their shares in order to provide liquidity and participate in the capital increase.

Market sources pointed out that the success of the campaign of the National Bank is of great importance for the Athens Stock Exchange, since confidence in the credit system and the Greek economy is restored thanks to it.

A year of improvement

The management of the bank believes that 2013 will be a year of improvement for the group. Since the beginning of the crisis, the management of the bank has been trying to reduce functional costs by 25% and initiatives for further and bigger cuts are currently being carried out. Activities for the improvement of the capital adequacy have been implemented and the bank has an advantage in terms of liquidity, since its loan-deposit ratio is 95% in Greece.

AtticaBank

Optimism reigns in the bank’s corridors in terms of the coverage of 400 million euro by increasing the share capital and maintaining the private nature of the bank. Next Tuesday, on 11 June, the period of exercising the rights will start and it is believed that the bank will be able to gain a place in the future of the domestic credit sector. In the shadow of the best banks, Attica Bank is going its own way, wishing to remain standing and become a pleasant surprise. It is certain that if it manages to collect the required capital, which will allow it to move independently in the future, on the one hand, this will be a big success, and on the other hand, it will give it the right to work with greater flexibility in subsequent phases.

What does Attica Bank have and why does optimism increase with the approach of 11 June?

1. Strong commitment to the Insurance Fund of workers in the construction sector: the fund has taken a final decision to participate in the recapitalisation and increase its percentage by covering a part of unused shares up to the amount of 205 million euro. 50% of the required capital is provided by the main shareholder and the management of the bank sees that investors’ interest is increasing steadily.

2. Contacts with Greek and foreign investors: the leadership of Attica Bank has been in constant contact with investors for several months. And it is not following the logic "let’s collect as much as we can," but working at an informational level, in order to attract those who really want to get a seat in a promising bank, bank sources said.

In parallel, important meetings with foreign funds were held. Various scenarios are being distributed, under which the bank is in an advanced stage of discussions with some funds, but currently nothing can be considered certain. Positive messages are coming from the network, since interest is increasing daily and a large group of Greek businessmen are bound to participate in the recapitalisation.

3. Security of participation: the money that interested investors will put into the recapitalisation of Attica Bank will be transferred into an interim account. This means that if the recapitalisation fails shareholders will get their money back. In this way uncertainty and caution is limited.

What has not yet been made clear is what will happen in the event that the bank fails to raise 400 million euro, but only 350 million euro, for example. Given that "bad" banks must meet their funding requirements in the same way, everything will depend on the decision of the Troika.

Tags: Recapitalisation National Bank of Greece Attica Bank
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