ECONOMY

Piraeus Bank approves 400-mln-euro capital boost

Shareholders of Greece’s fourth-largest lender Piraeus Bank approved on Friday a 400-million-euro capital boost, through the sale of new preferred shares to the state.

Piraeus is the second Greek lender this week to have used a 2008 bank support law to raise capital and shield itself from the country’s ongoing debt crisis.

Greek banks will be hit hard from a sovereign debt cut plan, under which private sector bondholders will accept a 50 percent discount on the nominal value of their holdings of Greek government bonds.

Shareholders of National Bank of Greece, the country’s biggest lender and one of its biggest private bondholders, decided on Thursday to raise up to 1 billion euros under the terms of the bank support law, which was passed in 2008 to help lenders raise liquidity during the global credit crisis. [Reuters]