National Bank of Greece plans 1 bln pref. share issue

Greece's largest lender National Bank will seek shareholder approval on December 22 for an issue of preferred shares to the state, raising up to 1.0 bln euros to boost its liquidity and capital adequacy, an official at the bank said on Tuesday.
The group is making use of a law introduced in 2008 to help banks with liquidity during the global credit crisis.
"If there is no quorum on December 22 there will be a repeat shareholders meeting on December 27," an official at the bank told Reuters on condition of anonymity.
Greek banks are trying to cope with rising bad debts and a shrinking deposit base as the austerity-hit country struggles through its fourth straight year of economic contraction, seen topping 5.5% this year.
Banks are expected to have to recapitalise after writedowns resulting from a planned bond swap agreed in October, which calls for a 50% nominal writedown on Greek government bonds.
NBG had only tapped 350 mln euros under the scheme out of a total of 1.35 billion it had been allocated. If it raises the full 1 bln euros, its core Tier 1 capital ratio will improve to 11% from 9.5% at end-September, the official said.
The preferred, non-voting, shares would pay a 10% dividend.
NBG's previous 350 mln euro issue amounted to 4% of the bank's equity capital. Other banks including Alpha and Eurobank had also made use of the scheme, raising larger amounts.