Piraeus Bank proceeded to a capital increase of €1.05 billion, announced Reuters. Piraeus is the fourth largest private financial institution in the country and following the example of the National Bank of Greece has decided to proceed to €800 million rights issue. Another €250 million will come from the sale of convertible bonds. Financial Times reported that the capital increase will take place in early 2011 and the aim is to strengthen the bank's capital adequacy as it passed the summer stress test of the European banking system right on the edge with the minimum 6%.
On the advice of its consultants Goldman Sachs, Merrill Lynch and UBS Piraeus Bank withdrew its proposal to purchase the State Agricultural Bank and Postbank. In early summer this proposal wheeled talks about the Greek banking market consolidation as it began experiencing severe problems with international markets crediting after the financial crisis in the country deepened. The banking system was directly and closely dependent on the European Central Bank, which bound itself to buy Greek government bonds from commercial banks.
According to experts, the capital increase will enable Piraeus Bank to gain better market position in the upcoming rearrangement of the banking system.
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