A bill to allow bank bailout fund HFSF to participate in the share capital increases of banks up to the stake it already controls is set to be tabled in Parliament. This move is being made ahead of the SCI of Piraeus Bank, of which the Hellenic Financial Stability Fund controls 61.3% and intends to operate as the guarantor that will attract private funds too.
The share capital increase is planned for next month and will range between 800 million and 1.1 billion euros. The aim is to boost the bank’s capital so that Piraeus can cover its losses from the new bad-loan securitizations.
The lender has completed two securitization projects of a total value of €6.9 billion in the context of the Hercules asset protection scheme, and after their completion the bank’s nonperforming loans rate will come to 36%. That €13 billion will enter the Hercules mechanism, as it will be extended by another 18 months – i.e. till October 2022.
The participation of the HFSF in banks’ share capital increases will follow a decision by its general board, following reports by two independent consultants.