National Bank of Greece to raise capital

Discussion in 'Wall St. News' started by ASusilovic, Sep 9, 2010.

  1. Sept. 8 (Bloomberg) -- National Bank of Greece SA, the nation’s largest lender, dropped 6.4 percent in Athens trading as it announced plans to raise 2.8 billion euros ($3.6 billion) to strengthen capital and fund expansion.

    The Athens-based lender will offer existing investors 121.4 million new shares at 5.2 euros apiece to raise 631 million euros, National Bank said yesterday in a statement. It will also issue convertible bonds to raise 1.18 billion euros and sell part of its Turkish unit.

    “It’s a bold move that makes a lot of sense,” Alexander Kyrtsis, an analyst at UBS AG in London, said in a note to clients today. The amount that National Bank plans to raise is “significantly higher” than market estimates of 1 billion euros to 1.5 billion euros, he said.

    Greek banks face soaring loan losses and a potential contraction in lending as the government implements austerity measures following the country’s 110 billion-euro bailout in May. National Bank is relying on markets outside Greece, including its Finansbank unit in Turkey, to boost profit.

    Five banks, including Deutsche Bank, agreed to underwrite National Bank of Greece SA’s 2.8 billion-euro rights offering this week.