National is not ruling out a share increase

By Yiannis Papadoyiannis

National Bank of Greece has almost finished drafting its definitive plan to cover the lender’s capital requirements as determined by its Bank of Greece stress test, and a share capital increase may be on the cards after all.

National Bank is due to table its draft plan to the central bank for approval on Tuesday, following lengthy efforts by NBG officials aimed at creating a blueprint that will receive the market regulator’s nod without further ado. Sources say that the bank’s administration continues to rely on covering its needs of 2.18 billion euros through organic profits and sales of assets, with officials stressing the high number of subsidiaries and other assets owned by the group.

However the NBG administration is also examining the option of a share capital increase, which would have a complementary role to the rest of its actions. The cash to be collected will operate as a safety cushion and if the lender manages to cover its needs through the sale of assets, it will use the cash at a later date to pay for the Greek state’s preferred shares from its recapitalization. NBG also plans to issue a bond.