Greece’s ATEbank plans €1.26 bln cash call

Greece's ATEbank, the only Greek lender to fail EU-wide bank stress tests last year, said on Wednesday it was planning a 1.26 bln euro ($1.77 bln) share capital increase to bolster its balance sheet.
Greece's debt crisis and austerity policies have hurt banks through their government bond holdings, rising bad loans and lost access to wholesale funding.
The bank reported a loss of 438 mln euros for 2010 on Wednesday versus a 452 mln loss in 2009, with provisions for impairment of loans and other assets down 26.8% year on year.
"The deteriorating economic environment led ATEbank Group to tighten further its risk valuation criteria and maintain high provisioning levels against loan and other asset impairments up to 604 mln euros," the bank said in a statement.
Non-performing loans increased from 7.6% in 2009 to 11.1% of the total loan portfolio at the end of 2010, the bank said in a statement.
ATEbank, 77% state owned, was last year courted by Piraeus Bank, which offered to buy the government's stake. But government indecision prompted Piraeus to withdraw its offer.
ATEbank was the only Greek lender to fail the pan-European stress test last year as the simulation revealed a Tier I capital ratio of 4.36% — above the regulatory minimum of 4% but below the stress test threshold of 6%.
"The proceeds from the proposed share capital increase will … restore ATEbank's capital adequacy ratios to levels set by regulatory requirements, and secure its viability in the current volatile economic environment until the restructuring plan yields its full results," the bank said.