DJ Greece's Piraeus Bank: Won't Disclose Capital Increase Plans

ATHENS (Dow Jones)--Greece's Piraeus Bank SA (TPEIR.AT) Monday refused to disclose its capital raising plans after weekend press reports said the bank would need to secure at least EUR1 billion to finance a planned merger bid.

"Following reports in the daily press, Piraeus Bank will determine in the appropriate time--and depending on how the procedure progresses--will announce to the investor community the way in which it will raise the necessary capital," the bank said in a statement to the Athens Stock Exchange.

According to the Sunday edition of To Vima newspaper, the capital increase will be used to pay for the planned takeover of state lenders Hellenic Postbank SA (TT.AT) and ATEBank SA (ATE.AT), and to pay back preferred shares held in the bank by the Greek government.

Earlier this month, Piraeus Bank made a combined EUR701 million offer for both ATEBank and Hellenic Postbank, though many analysts questioned whether it had the funds to do so.

European banking stress tests Friday also showed Piraeus Bank barely met minimum capital requirements.

The tests, carried out by the European Union's Committee of European Banking Supervisors examined the banks' balance sheets, compliance with capital rules and how their exposure to the sovereign debt of 30 European countries would affect them in certain scenarios.

"A capital increase is a possibility and we will look at it," a bank official said, without disclosing further details.

-By Alkman Granitsas, Dow Jones Newswires; +30 210 331 2881; alkman.granitsas@dowjones.com

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(END) Dow Jones Newswires

July 26, 2010 11:05 ET (15:05 GMT)

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