The critical recapitalization of the four systemic banks in Greece is to enter its final phase, with the bank management putting their final touches to their plans, which aim to maximize private participation to cover their capital needs. The stress test results show that 14.4 billion euros will be needed, while the bailout agreement made a provision for 25 billion euros in aid.
On Tuesday afternoon Eurobank announce that it will carry out a capital increase worth 2.12 billion euros, to cover the deficit detailed in the outcome of the recent stress tests. The bank’s board of directors has announced a general meeting for the 16th of November, where it will b called to decide on approving a reverse split of 100 old shares for each new one as well as to issue Contingent Convertible securities (CoCos).
Likewise, the National Bank has decided 100% of its Turkish subsidiary Finansbank, as part of its plan to increase its capital by 4.6 billion euros. The bank hopes to raise 1.6 billion euros from issuing new common shares, while the sale of Finansbank may generate at least 3 billion euros. Should the everything go ahead as planned, the National Bank will only need 500 million euros of support from the Hellenic Financial Stability Fund.
