Marfin Popular Cyprus files capital plan; to raise 1.97 bln by June

Cyprus-based Marfin Popular Bank said on Friday it had submitted a "capital enhancement" plan to regulators designed to raise its benchmark core Tier 1 capital to 9% by the end of June.
The island’s second biggest lender did not specify the steps it proposed to take, but the European Banking Authority had in December said Marfin Popular would require additional capital of 1.97 bln euros ($2.5 bln) to reach a core Tier 1 ratio of 9%.
In a statement, group Chairman Michalis Sarris said the plan "combines focused management actions as well as capital-raising initiatives aspiring to shield and enhance (the) resilience of the group given the ongoing market developments."
The group has appointed a team to engage in a "comprehensive risk-weighted asset mitigation and capital-enhancing actions across all geographical areas", Sarris added.
J.P. Morgan and Houlihan Lokey were acting as financial advisers in relation to the plan, the bank said.
On Wednesday, the bank said its 2011 results would reflect higher impairments because of the deepening sovereign debt crisis in Greece, to which it remains heavily exposed.
Provisions for loan impairments mainly related to Greek operations were expected to be higher, and by extension, goodwill related to the Greek operations would be impaired, the bank said in a statement. It is widely expected to restructure its retail operations in Greece as well , where it has a network of about 300 branches.
For the first nine months of the year, the bank reported a loss of 282.2 mln euros.
The Group said that “ongoing improvement in revenue quality was reflected in stronger core banking revenues, which rose 12% y/y and 9% q/q to 260 mln euros. Third quarter operating revenues rose 2% y/y and remained flat q/q at 262.5 mln.
Last month, the bank said it is to sell its 70% stake in Estonian subsidiary Marfin Pank Eesti AS to Ukrainian firm Ukrselhosprom Pcf LLc for 6.6 mln euros ($8.6 mln). The deal is expected to be completed by the end of February.
The stock closed at 28.2 cents on Friday on the Cyprus Stock Exchange, down 2% from the previous day. In a year, the stock has shed some 77% of its value, leaving the bank market cap at 443 mln euros.