Piraeus Bank raises private funds to avoid state control

Greece’s Piraeus Bank raised more than 19 percent of the funds it needed to plug a capital hole from private investors in a rights offering, it said on Wednesday.

The bank is the third major Greek lender to successfully recapitalise without falling under the full control of the Hellenic Financial Stability Fund (HFSF), a bank rescue fund financed from Greece’s EU/IMF bailout package.

Piraeus said it raised 19.83 percent or 1.455 billion euros from private investors, confirming what a senior bank official told Reuters a day earlier.

Greece’s four biggest banks, including Piraeus, needed 27.5 billion euros ($36 billion) to repair their solvency after losses on sovereign debt writedowns and bad loans.

Under a recapitalisation scheme Athens agreed with the European Union and International Monetary Fund, at least 10 percent of new equity issues by its four big banks must be bought by the market for them to stay privately run.

Piraeus Bank’s 35.6-for-1 rights offering at 1.7 euros a share, aimed at plugging a 7.33 billion euro capital hole, ended on Tuesday.

Peers Alpha Bank and National Bank have met the required threshold, retaining management control. Eurobank has opted to be fully recapitalised by the rescue fund.