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Hellenic Bank, the island’s second biggest lender that avoided a public bailout after private investors stepped in and pumped about EUR 100 mln earlier this year, said the board will convene on October 25-26 to review capital matters as well as the financial results for the first 9 months.
The bank had announced last month that it would proceed with a pro-rata rights issue (of an as yet unspecified size) to its existing shareholders to “support the needs of Hellenic Bank Group’s business plan while at the same time reinforce the bank’s Common Equity Tier 1.”
The bank said that the fresh capital raising is part of the European Central Bank’s overall assessment exercise, or ‘stress test’, that will be published on Sunday for all 130 Eurozone systemic banks, including four in Cyprus.
Group Chairwoman Irena Georgiadou said in a statement that “both the strong balance sheet and the comfortable liquidity make up the platform upon which Hellenic Bank Group would actively and catalytically participate in the recovery and support of the Cyprus economy.”
Last month, the bank introduced 151 mln new shares that arose from the conversion of company convertible (CoCo) bonds, with only 25 mln CoCo bonds remaining outstanding.
The bank, that secured fresh capital from institutionals Wargaming.net, New York-based hedge fund Third Point and local investment house Demetra, announced on September 1 that first half after-tax losses doubled year-on-year to EUR 95.5 mln, due to a deterioration of the bank’s loan portfolio and further increase in provisions.
Georgiadou, in her first report to shareholders after her appointment in May, warned that the Cyprus economy and society continued to face “an unprecedented crisis”, but that the obstacles faced by the crisis will be overcome bringing better days for all. She said that during the second quarter, the bank strengthened its balance sheet further with comfortable liquidity and improved coverage of non-performing loans (NPLs). Deposits increased by 6% since the end of 2013, and the net loans to deposits ratio improved even further to a best in class ratio of 57%.