Greece’s four largest banks need to boost their capital by 27.5 billion euros ($36.3 billion) after taking losses from the country’s debt swap earlier this year, the largest sovereign restructuring in history.
National Bank of Greece SA, the country’s biggest lender, needs to raise 9.8 billion euros, according to an e-mailed report by the Athens-based Bank of Greece today. Eurobank Ergasias SA needs 5.8 billion euros, Alpha Bank needs 4.6 billion euros and Piraeus Bank SA needs 7.3 billion euros, according to the report. Total recapitalization needs for the country’s banking sector amount to 40.5 billion euros, the report said.
The 50 billion euros earmarked for Greek banks in the country’s bailout program “is appropriate to cover the recapitalization and restructuring costs of the Greek banking sector,” the central bank said. “It is expected to remain adequate under reasonable levels of economic uncertainty.”
The banks have received bridge recapitalization loans from the Hellenic Financial Stability Fund to raise their core tier one capital ratios to 9 percent, as required under the terms of the country’s bailout from the European Union and International Monetary Fund. The recapitalization must be completed by the end of April, through a combination of common equity and contingent convertible bonds.