Alpha Bank, the country’s third-biggest lender, approved plans yesterday to raise as much as 986 million euros in a sale of new shares in order to cut ties with the government and start paying dividends. Shareholders will be offered three new shares for every 10 held at 8 euros apiece, according to the bank. «This capital increase will give Alpha Bank a strong competitive advantage as it emerges as a reference banking group for Southeastern Europe,» Chairman Yannis Costopoulos said in a statement. The sale is expected to be completed in late November and early December. Alpha plans to use the funds to repay 940 million euros of preferred shares issued earlier this year to the state in the framework of a 28-billion-euro government bank-support scheme. The repayment of the shares will allow the bank to resume paying dividends, the lender said, adding that new stocks will have the right to any dividend payout. Alpha joins a raft of other lenders raising cash to repay state aid received at the height of the financial crisis. France’s BNP Paribas, Societe Generale and Credit Agricole have announced cash calls for a combined 12 billion euros to repay state support. Austria’s Erste Group Bank is planning to raise at least 1 billion euros in early November, sources have said, but that will be used mainly to boost capital. Alpha Bank stocks rose 4.66 percent on the Athens bourse yesterday to 13.71 euros after they plummeted more than 6 percent on Friday. Despite diluting earnings per share, the news is positive as it will help Alpha pursue growth in a move that may be followed by other lenders, analysts said. «The rights issues comes at the right time,» Proton Securities said in a note, adding, «The bank is preparing itself ahead of a year that may mark an economic recovery.» Piraeus Bank, however, which received a 370-million-euro capital boost, said yesterday it was not contemplating a similar move as its capital adequacy remains sound.