Eurobank May Need to Sell Shares to Raise Capital, HFSF Says

Eurobank Ergasias SA (EUROB), the Greek bank controlled by the country’s recapitalization fund, will probably need to sell shares in the first quarter of 2014 to cover a shortfall in capital, the fund’s chief said.

The lender may have to sell stock at a lower price than the recapitalization fund paid when it injected cash into Eurobank in June, Anastasia Sakellariou, chief executive officer of the Hellenic Financial Stability Fund, told journalists in Athens today. She didn’t say how much capital the bank needs.

The new capital requirement stems from a BlackRock Inc. review of Eurobank’s loan portfolio, she said. The stability fund spent 38.9 billion euros ($53.6 billion) in June revamping the country’s banking system.

For the recapitalization of Greece’s four systemic banks -- National Bank of Greece SA, Alpha Bank AE, Piraeus Bank SA and Eurobank -- the fund spent 25.5 billion euros. Only Eurobank failed to meet a requirement to raise 10 percent of the capital needed from private investors. As a result, management of the lender passed to the HFSF.

Eurobank rose 1.2 percent to 69.3 cents in Athens trading, and has declined 89 percent this year.

To contact the reporter on this story: Christos Ziotis in Athens at cziotis@bloomberg.net

To contact the editor responsible for this story: Frank Connelly at fconnelly@bloomberg.net

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.