BUSINESS

Piraeus and Alpha set for a share capital increase

By Yiannis Papadoyiannis

The process for the return of Greek banks Piraeus and Alpha to private hands following their recapitalization by the Hellenic Financial Stability Fund last year has moved a step closer, as the two lenders will not have to wait for the voting on the bill concerning banks’ share capital increases.

That is because they will conduct the process according to the existing legislation by offering new shares in a process that is separate from the exercise of warrants through which the HFSF will sell the banks’ shares to private investors.

Furthermore, the prices of both Alpha and Piraeus stocks are significantly higher than when they were recapitalized, so the increases can go ahead unhindered even if the bill is delayed. By contrast Eurobank will need the new law as it was recapitalized without private sector participation.

Alpha appears certain it will have its 1.2-billion-euro increase covered and will be hoping to attract investors on the strength of its finances, which according to its 2013 results issued on Monday showed an improvement in terms of liquidity as well as the quality of its revenues and loan portfolio.

Alpha saw its nonperforming loans decrease in the last quarter of 2013 for the first time since the financial crisis broke out in Greece, and the bank is not ruling out the distribution of a dividend in 2014. Alpha ended last year with losses of 303.7 million euros, against losses of 1.09 billion euros in 2012. Its bad loan rate dropped 20 basis points to 32.7 percent and operating spending fell 6.6 percent year-on-year.

Meanwhile the credit sector received a vote of confidence on Monday from Moody’s and JP Morgan, which expressed agreement with the estimates for local lenders that the Bank of Greece announced on Friday – totaling 6.4 billion euros.

Moody’s said the BoG conclusions concurred with its own and deemed the outcome of the stress tests a positive credit event. JP Morgan said the BoG estimates were quite conservative, while Deutsche Bank issued a “buy” recommendation for National Bank shares.

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