By Nektaria Stamouli
ATHENS--One of Greece's largest lenders, Eurobank Ergasias SA,
has secured nearly half of the roughly EUR3 billion ($4.1 billion)
it needs to plug a hole in its balance sheet, the country's
bank-rescue fund said Tuesday.
The Hellenic Financial Stability Fund said in a news release
that a group of investors--including Canadian investment firm
Fairfax Financial Holdings Ltd., Capital Research and Management
Co., Wilbur Ross & Co., Fidelity management and Research Co.,
Mackenzie Financial Corp. and Brookfield International Bank
Inc.--committed to subscribe for 47%, or EUR1.3 billion, of
Eurobank's share offering.
Later Tuesday, the board of the country's largest lender by
assets, National Bank of Greece, is expected to confirm a plan to
cover a roughly EUR2.3 billion shortfall in its balance sheet.
The Bank of Greece last month said the four main Greek
lenders--National Bank of Greece SA, Piraeus Bank SA, Alpha Bank AE
and Eurobank--needed nearly EUR5.8 billion in additional
capital.
Greece's banks have been battered heavily by the country's
six-year recession, a steep decline in Greek property prices and an
unprecedented EUR200 billion sovereign-debt restructuring in early
2012.
Last year, they were recapitalized with the help of a European
Union loan, but together they still hold some EUR70 billion in bad
loans, a sum equal to a third of Greece's annual gross domestic
product.
Although the bad loans continue to rise and aren't expected to
peak until late this year, efforts by Greek lenders to raise fresh
funds from foreign investors appear to be paying off.
The move by Eurobank and eventually by NBG follows the example
of the country's other two systemic banks-- Piraeus and
Alpha--which raised EUR1.75 billion and EUR1.2 billion,
respectively, in late March.
Eurobank, currently 95% owned by the country's rescue fund,
faced the biggest shortfall--requiring some EUR2.9 billion.
The lender fell under state control last April, as it dropped
plans to raise money from investors and the Hellenic Financial
Stability Fund fully covered a EUR5.8 billion share issue.
"The remaining amount of the capital Increase will be covered
via a book building process for international and other qualified
investors and a public offering in Greece," HFSF said in the new
release.
Write to Nektaria Stamouli at nektaria.stamouli@wsj.com