Laiki Bank apologised to irate shareholders for its exposure to Greek debt which has saddled the bank with mammoth losses and forced it to seek new capital.
Marfin Popular Bank, which was renamed Cyprus Popular (Laiki) Bank, posted 2011 losses of 2.5 bln euros after taking a 60% writedown on the value of its Greek bonds.
It now plans a 1.35 bln-euro share issue to meet regulatory requirements for a 9% core Tier 1 capital adequacy ratio by the end of June.
Attempts to find new investors were continuing but the Greek economic outlook appeared to be holding some potential investors back, bank executives said.
Marfin Popular, created from a merger of Greek banks Marfin and Egnatia and the century old Cypriot bank in 2006, amassed some 3 bln in Greek sovereign debt from 2007 to 2009.
"Looking back, it was wrong, and we must apologise," CEO Christos Stylianides told shareholders in Nicosia.
"I know it is not enough, and we are doing all we can so the bank gets back on its feet, and we can add value for shareholders."
The bank said it was actively looking for investors to participate in its new share issue and said there were encouraging indications of interest but hurdles remained.
"The truth is there are some reservations over the climate of uncertainty in the Greek economy," said Michael Sarris, a former finance minister appointed as non-executive chairman in November.
"We believe a combination of a strategic investor with three or four institutional investors will be of help in raising capital," he added.
Rumours have suggested that Russia’s VTB conglomerate, owner of the Russian Commercial Bank with an operation in Cyprus, may be interested to participate. The bank has denied direct deals but said in an announcement last week that “investors had shown interest”.
Laiki Bank also announced that it made a profit of about 2.8 mln euros from the sale of a 71% stake in its Esthonian subsidiary, Marfin Pank Eesti AS.
It completed the sale to Ukraine’s Ukrselhosprom Pcf LLC for 6.6 mln euros, as part of a strategy to refocus on its Cypriot base, the bank said in a CSE filing.
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