Hellenic Bank, the privately recapitalised lender that has avoided any state rescue or bailout, has raised €201 mln from a rights issue offered to existing shareholders, more than the €105 mln capital shortfall identified by the recent European Central Bank’s stress tests on Eurozone banks.
Retail and institutional shareholders subscribed to the offer and exercised their rights at 3.75c each, with the bank saying that it can raise a further €20 mln until the end of January if necessary, corresponding to the available rights that were not exercised.
The Church of Cyprus, the one-time primary shareholder of the bank, said recently that it would not exercise the rights and would sell its free rights to third parties to raise funds for its own operations.
The three major shareholders that rescued the bank by raising €100 mln at the beginning of the year, online gaming giant Wargaming.net, New York-based hedge fund Third Point Hellenic Recovery Fund and local investment house Demetra Investments Ltd, have fully supported the rights issue, “reconfirming both their confidence in and their commitment to the group,” a bank statement said.
The announcement added that “by completing phase 1 of the bank’s rights issue, the Common Equity Tier 1 Ratio, pro forma 30 September 2014 following the conversion of the Contingent Convertible Securities 1 into shares becomes 12.8%, which significantly exceeds the corresponding minimum regulatory ratio.”
“The Group, without any exposure in the European Liquidity Assistance (ELA) and any dependency in the European Central Bank, with a strong balance sheet and capital base, ample liquidity and the depositors’ and shareholders’ confidence, is able to take advantage of the business opportunities and to further expand its customer base and market share,” the announcement added.
“Prudent choices and management allowed Hellenic Bank to continue its autonomous course, without any state support (bail out) and without any bail in by its depositors,” it concluded.
Under new management, the bank is widely expected to abandon its overly conservative approach of the past and adopt a more aggressive strategy in order to gain market share, both locally and abroad.
