June 28, 2017 / 11:33 AM / a year ago

Greece's Piraeus Bank set to consolidate shares

ATHENS, June 28 (Reuters) - Greece’s largest lender Piraeus Bank won shareholder approval at a meeting on Wednesday for a reverse stock split to reduce the number of its outstanding shares, which it hopes will improve their tradeability.

The bank was forced to issue billions of new shares after three rounds of recapitalisation in recent years to boost its equity capital.

But with the share price trading in cents, transactions on electronic platforms were becoming cumbersome, bank executives said.

Piraeus shares were down 2.4 percent at 0.2070 euros on Wednesday, underperforming the Athens bourse’s banking index which was losing 0.12 percent.

Shareholders approved a one-for-20 reverse split that will reduce the bank’s 8.73 billion outstanding shares to 466.6 million. The new par value will therefore increase from 0.3 euros to 6.0 euros.

“The move aims to facilitate the trading of the shares on electronic platforms and improve the stock’s marketability and liquidity,” Chief Executive Christos Megalou told shareholders.

Piraeus, which is 26.2 percent owned by Greece’s bank rescue fund HFSF, plans to slim down by selling wholly-owned subsidiaries in Bulgaria, Romania, Serbia, Albania and the Ukraine as part of its “Agenda 2020” plan to reduce its foreign exposures.

Megalou said the group will aim to increase lending to 5.0 billion euros annually by 2020 from 2.0 billion euros last year and improve its asset quality, which remains “the biggest challenge facing all Greek banks”. (Reporting by George Georgiopoulos; Editing by Elaine Hardcastle)

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