Alpha’s 1 billion increase

Alpha Bank is set to go ahead today with a share capital increase totaling nearly 1 billion euros. The second biggest Greek lender confirmed on Friday that its governing board will decide at its meeting today to increase its capital by up to 986 million euros through the distribution of three new shares for every 10 old ones at the price of 8 euros. The statement suggested that the sole purpose of this move is to raise capital in order to acquire all of the 200 million shares it had issued for the state a few months earlier. According to reports, JP Morgan will be among the underwriting firms. Meanwhile, a report due to be published next month by the Bank of Greece is expected to call for a further adjustment of commercial banks’ policy on provisions in view of the difficult financial environment. The report will highlight the massive increase in bad loans, the relevant index for which rose to 6.8 percent at end-June, from 5 percent in December 2008. In addition, the Bank of Greece will note the halving of commercial banks’ profits, although it will refer to positive developments such as the strengthening of their capital adequacy through the issuing of preference shares and the share capital increases carried out by certain lenders. Bank of Greece data showed that in August the rate of credit expansion slowed to 6 percent from 6.6 percent in July 2009, while the net flow of loans to households and enterprises came to 912 million euros. Of this amount, 804 million euros was given to companies and 108 million to households.