(Adds Fairfax comments)
ATHENS, March 15 (Reuters) - Greece’s National Bank (NBG) said on Friday Fairfax Financial Holdings Ltd’s interest in taking part in the bank’s recapitalization had ebbed because the Canadian investment fund wanted changes to the terms that were beyond NBG’s control.
NBG, the country’s biggest lender, said in a bourse filing that Fairfax had expressed an interest in up to 1.5 billion euros, which amounts to 10 percent of a capital raising to increase the bank’s solvency to levels required by the central bank.
“The expression of interest remained at an initial phase because Fairfax asked for changes in the framework of the recapitalization that are beyond National Bank’s control,” NBG said in the filing.
NBG officials would not provide further details.
The bank had said on Wednesday that Fairfax, controlled by investment guru Prem Watsa, was interested in acquiring a stake in it by taking part in an upcoming share offering.
Paul Rivett, Fairfax’s vice president for operations, said the company did not comment on specific investments, but he said Fairfax has an interest in recapitalizations in Europe. Fairfax took a 9 percent stake in Bank of Ireland in 2011.
“We’ve done this kind of thing in Ireland and it’s worked out very well for both the Bank of Ireland and the economy in Ireland,” he told Reuters, referring to a 9 percent stake in the Bank of Ireland Fairfax purchased in 2011.
“I think that’s a good model for other places in Europe so we’re continuing to look for opportunities to do the same thing.”
Greece’s top four lenders will issue new shares by the end of April to replenish their capital after the losses they suffered in the debt crisis from government bond writedowns and impaired loans.
The four banks - NBG, Eurobank, Alpha and Piraeus - together need 27.5 billion euros in fresh capital to bring their Core Tier 1 capital adequacy ratios to 9 percent.
Under the recapitalization framework agreed with the country’s international lenders, the banks will issue new common shares and contingent convertible bonds or CoCos to raise the needed capital, most of which will be provided by a state support fund.
NBG took over competitor Eurobank in February. Greece’s central bank has estimated the two lenders’ combined capital need at almost 16 billion euros. (Reporting by Lefteris Papadimas and George Georgiopoulos, additional reporting by Cameron French, Editing by Jane Merriman and Peter Galloway)