National Bank of Greece raises enough funds to remain private

National Bank of Greece said on Friday it had raised enough money from private investors in a share offering to ensure it avoids state control.

NBG is the second major Greek lender to successfully recapitalize without falling under the full control of the Hellenic Financial Stability Fund (HFSF), a vehicle to rescue Greek banks under an EU-IMF bailout plan.

Detailing the results of its 2.2-for-1 rights issue that ended on Thursday, NBG said it raised 10.8 percent of the funds needed to plug a 9.65-billion-euro capital shortfall, with about half, or 500 million euros, coming from foreign investors.

It said 120,000 domestic retail investors had subscribed for one-third of the 1.17-billion-euro rights offering.

Greece’s four biggest banks, including NBG, need 27.5 billion euros to restore their solvency after losses on sovereign debt writedowns and bad loans.

Under the recapitalization plan that Athens agreed with its international lenders, at least 10 percent of new equity issues by its four big banks must be bought by the market for them to remain in private hands.

Meeting the minimum threshold means NBG will not need to resort to issuing costly contingent convertible bonds (CoCos).

The remaining funds to plug the capital shortfall will be provided by the HFSF rescue fund in exchange for shares.

Last month, Alpha Bank raised 12 percent of its capital requirement from the market, retaining management control.

Piraeus Bank, which is carrying out a rights issue, is also expected to meet the threshold.

Eurobank has opted to be fully recapitalized by the HFSF.