EFG Eurobank, Greece’s third-largest lender, yesterday announced a surprise 1.2-billion-euro rights offering to finance targeted acquisitions abroad and help the growth of business, it said in a statement. «The goal is to further strengthen the group’s presence in New Europe and the Eastern Mediterranean, both in countries where it is already active and those showing strong prospects for growth, where it has no presence,» the statement said. EFG said the growth of business abroad, particularly in lending, is estimated to be above expectations in the first half of 2006. Swiss-based EFG group, EFG Eurobank’s main shareholder with 41.2 percent, has already indicated it will exercise its rights issue for its entire stake. The bank has already invested about 1.3 billion in New Europe, and has a network of about 900 branches in six countries. It is expected to convene an extraordinary general meeting, with a view to implementing the share capital increase, within September 2007. The increase will raise the bank’s total share capital to close to 13 billion. EFG Eurobank has forecast profits of more than 60 million from operations in New Europe, and, on the basis of existing investment alone, of more than 260 million for 2009. EFG Eurobank’s announcement comes at a time when many consider that the intensification of competition in the sector will spark off moves toward concentration. Marfin Investment Group is currently implementing a 5.2-billion-euro share capital increase which is projected to arm it with abundant liquidity, capable of fueling strong restructuring upheavals. Many also take the view that EFG Eurobank’s rights issue is designed to prepare the group for such an eventuality, rather than for expansion abroad. It may be noted that Piraeus Bank shareholders have also given management carte blanche to proceed to a capital increase it deems necessary in the next five years.