ATHENS, Nov 3 (Reuters) - Greece’s Piraeus bank on Tuesday announced plans to issue new shares to raise up to 4.9 billion euros to plug a capital shortfall showed in ECB’s health checks.
Piraeus will also issue contingent convertible securities of up to 2.04 billion euros, it said in a bourse filing, and called an extraordinary shareholders meeting on Nov. 15 to get its plan approved.
A health check by the ECB last weekend showed the four main Greek banks had a 4.4 billion euro capital shortfall under a “baseline” scenario of normal economic conditions prevailing in the country, and a 14.4 billion euro gap under an adverse scenario.
Piraeus has a capital shortfall of 4.93 billion euros under the adverse scenario of its stress test.
If Greek banks cover the baseline 4.4 billion gap from private investors, the state bank bailout fund HFSF will supply the remainder, up to the 14.4 billion defined in adverse conditions, by buying a mix of new shares and contingent convertible bonds (CoCos), which convert to equity if capital buffers fall below a certain level. (Reporting by Angeliki Koutantou)