“We estimate this will be closed by the end of the year,” Nikolaos Karamouzis, deputy chief executive officer at the Athens-based lender, said in a phone interview today. He added that was interest in the sale and that the transaction would add about 80 basis points to the bank’s Tier 1 capital ratio.
Eurobank’s planned 150 million-euro ($211 million) convertible bond will add another 30 basis points to the ratio and unallocated general provisions of 220 million euros an additional 50 basis points, he said.
Eurobank was one of two Greek lenders who fell short of European stress tests released on Friday, with a Tier 1 capital ratio, a measure of financial strength, of 4.9 percent under an adverse scenario, missing the 5 percent minimum designated as necessary by the European Banking Authority. That’s 58 million euros ($82 million) short of the required capital target.
The ratio came to 7.6 percent when accounting for Eurobank’s sale of a stake in Polbank EFG, its Polish business, to Raiffeisen Bank International AG (RBI) in February and its merger with Dias Portfolio Investment Fund.
The Poland and Dias deals alone, both completed, bring the bank to 6 percent, “marginally over that grey area between 5 percent and six percent,” Karamouzis said.
Eurobank said last week it may sell a stake in Turkish unit Eurobank Tekfen, allowing the bank to re-direct resources to its international operations while strengthening its capital and liquidity. Karamouzis said the bank didn’t plan the sale of any other international units for the moment.
The disposal is the second for Eurobank after its sale of a stake in Polbank EFG to Raiffeisen in February. Raiffeisen paid 490 million euros for a 70 percent stake in money-losing Polbank, helping lift Eurobank’s balance sheet.
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