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The capital increase of the National Bank of Greece was completed successfully

13 October 2010 / 14:10:22  GRReporter
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The capital increase of the National Bank of Greece was completed with € 3.3 billion. According to the official release of the bank, subscription reached 1.83. Greek analysts considered the recapitalization an important step that will help the largest commercial bank in Greece to return to financial markets in the coming months. It will also eliminate its dependence on the European Central Bank, which is currently the only bank accepting Greek government bonds from Greek commercial banks. Naftemboriki economists estimated that the capital increase of the National Bank of Greece will help the whole banking system in the country. Imerisia reads that four large international banks assured NBG that they are ready to grant interbank loans to thereby facilitate its funding.

At the same time, NBG intends to sell 20% of its shares in the Turkish Finansbank. The Bank expects to receive about one billion euros from this transaction. Financial advisors will be appointed for the transaction to assess the best market opportunities. The sale transaction is expected to be held between January 15 and  February 15 the next year.

Searching for new investors, the management of NBG turned to key players from international markets. The visit of the Bank’s CEO Apostolos Tamvakakis to the U.S.A. showed that foreign investors consider the process of fiscal consolidation in the country positive and support the recapitalization of the Greek Bank. Tamvakakis met Josef Ackermann – Deutsche Bank CEO, Colm Kelleher – Morgan Stanley CFO and Jamie Dimon – Chairman of JP Morgan, during his stay.

Overall, the recapitalization of the National Bank of Greece was considered highly successful. The bonds issued reached total € 3.316 billion which is € 1.83 billion above the starting price. Naftemboriki announced that over € 620 million for 119,302,142 new ordinary shares, representing 98.3% of the total equity growth, were paid for exercised and acquired shareholders’ rights during the negotiations. The amount of € 1,157,000 for 222,655,317 convertible bonds, equaling 97.8 percent of the total amount of convertible bonds, was paid for exercising and acquiring shareholders’ rights during the negotiations.

The capital increase of the National Bank of Greece made many economic analysts in the country to present the Bank as the savior of the State Agricultural Bank as it didn’t pass the stability stress-test of European banks in the middle of the summer. After Piraeus Bank withdrew its proposal to purchase Postbank and ATEbenk NBG proved to be probably the only bank able to privatize the troubled state bank. After the circulation of this view, the Executive Director of the National Bank was quick to refute the rumours and said that there is no interest in the Agricultural Bank for the moment.

Tags: EconomyMarketsNational Bank of GreeceCapital increase
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