"Handshake across the Himalayas"
India and China will study new ways to ease tensions along their ill-defined border, Chinese Premier Li Keqiang said on Monday in his first foreign trip since taking office, which comes just weeks after a military stand-off between the Asian giants in the Himalayas. Full Article | Slideshow
Confused while buying stocks? Get buy, sell or hold recommendations from VantageTrade. Full Coverage
Greek bank recap terms not very enticing: Eurobank CEO
ATHENS (Reuters) - Greece's plan to recapitalize its banks does not offer strong incentives for private investors whose participation is necessary to keep the lenders from further burdening a debt-laden state, one of the country's top banks said on Thursday.
"The banking system's recapitalization is a big challenge," Eurobank (EFGr.AT) Chief Executive Nikos Nanopoulos said in a speech to business figures in Thessaloniki.
"It is a fact that the recapitalization terms do not finally look that enticing ... for private shareholders," he said, without specifying why the terms were not attractive enough.
On Monday, Athens unveiled a long-awaited framework to recapitalize its banks, whose capital base was nearly wiped out after huge losses from a sovereign debt swap and rising loan impairments because of a deep recession.
Under the plan, banks will have to issue new shares to achieve at least a 6 percent core Tier 1 capital adequacy ratio and convertible bonds or so-called CoCos to boost it up to 9 percent.
The private sector must take up at least 10 percent of the new shares to be issued to keep lenders privately run. The remainder will be taken up by a bank support fund that is funded from the country's bailout.
Greece and its international lenders have earmarked 50 billion euros from the country's 130-billion-euro bailout to recapitalize viable banks.
Authorities have set up a bank support fund, the Hellenic Financial Stability Fund (HFSF), to recapitalize the sector. The fund has already injected 18.5 billion euros into the country's four biggest banks.
Failure to meet the 10 percent private sector participation requirement will mean nationalization, which Nanopoulos said must be avoided.
Under the recapitalization plan, the new shares banks will issue will be priced at a 50 percent discount to the average price 50 days prior to the offering.
The HFSF fund, which will provide most of the new capital by buying most of the new shares and all of the convertible bonds banks will be issuing, will become their biggest shareholder.
(Reporting by George Georgiopoulos; Editing by Mark Potter)
- Tweet this
- Share this
- Digg this