Preparations for the recapitalization of the country’s major lenders are to be completed on Tuesday as Eurobank Ergasias holds a general shareholders meeting after National Bank of Greece (NBG) decided at its own shareholders meeting on Monday to aim for private participation of 12 percent in its share capital increase.
NBG Chief Executive Alexandros Tourkolias stressed that he is confident the bank will achieve the target of at least 10 percent participation from the private sector, so that the lender can avoid nationalization, and called on the bank’s shareholders to take part in the process not for sentimental or ideological reasons, but because of National’s comparative advantages.
“This is what makes National Bank stand out from the country’s other credit institutions,” Tourkolias told shareholders.
Referring to the group’s advantages, Tourkolias singled out the improvement in liquidity and the bank’s strong deposit base, the high profits from international activities – and particularly Finansbank in Turkey – that offset domestic losses to a great extent, and the healthy structure of the loans portfolio, as most of it concerns healthy mortgage loans and loans issued to the country’s biggest and most robust enterprises.
“These advantages,” Tourkolias said, “pave the way for a future return to profits, allowing NBG to play its traditional role as the main source of funding and growth of Greek economy.”
The meeting approved the share capital increase of 9.756 billion euros, with the bank aiming at covering 1.17 billion euros (or 12 percent of that) from private investors. It also decided to issue convertible bonds (CoCos) only if that is deemed necessary.
The bank’s board will convene today to approve yesterday’s decision on the increase so as to submit it to the Capital Market Commission. It will meet again next week to specify the terms and the timetable of the process, which will be completed by the end of June.
Eurobank, of which National controls 84 percent, will on Tuesday hold its own general shareholders meeting, following its board’s decision to have the whole of its share capital increase, just under 6 billion euros, covered by the Hellenic Financial Stability Fund (HFSF).