Piraeus Bank is planning a capital boost of about 1 billion euros through a share placing with institutional investors, the Greek lender said on Tuesday as it reported that it had swung to a loss last year.
Piraeus, which is 61.3% owned by the Hellenic Financial Stability Fund (HFSF), said the planned equity offering will reduce the stake held by Greece’s bank rescue fund to a minority shareholding without any blocking power. The Greek bank said in a statement that it had also signed a binding agreement to sell its merchant acquiring unit to Euronet Worldwide for €300 million euros.
“In 2020 we managed to navigate a number of headwinds, achieving significant milestones that set the foundations of the next day for Piraeus Bank,” CEO Christos Megalou said, adding the bank was now taking another major step to derisk its balance sheet and enable it to focus on funding the Greek economy.
Piraeus also said that it had struck a deal with global investor Christofferson Robb & Co (CRC) to securitize performing small business and corporate loans in a so-called synthetic securitization, which it said is a first in the Greek market. The target size is about €2 billion of risk-weighted assets in two transactions. The first of about €800 million was signed on March 11 with CRC and a second one for about €1.2 billion is scheduled later this year. Piraeus said the implied positive capital impact from the two transactions is about €400 million. It may also issue a Tier 2 bond to raise it up to €600 million. [Reuters]