Bloomberg
October 4, 2018
Greek bank stocks reeled amid growing concerns about their need for more capital, even as the biggest lenders were said to set ambitious new targets for reducing their piles of bad debt.
The benchmark FTSE Athex banks index dropped almost 9 percent on Wednesday, after earlier in the day slipping as much as 18 percent. Piraeus Bank SA closed 21 percent lower, having slumped 30 percent to the lowest ever after Chief Executive Officer Christos Megalou told Reuters that the bank is looking for an opportunity to issue debt to boost capital. Bloomberg reported on Friday that the ECB told the lender to increase capital this year.
Piraeus must raise about 500 million euros ($577 million) by selling tier 2 bonds under a plan agreed with the ECB’s Single Supervisory Mechanism, two people with knowledge of the matter told Bloomberg. Traders say the recent deterioration in the European bond market amid political tensions between Italy and the European Union adds to worries about Piraeus’s recapitalization efforts.
The lender is monitoring debt capital markets to identify the right timing for the issuance of the bonds, according to an Athens bourse filing it issued Wednesday in response to press reports. The issuance “remains subject to market conditions,” Piraeus said.
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