* Piraeus Bank plans 1.0 billion euro equity offering
* HFSF’s 61.3% stake to fall below blocking minority
* To issue Tier-2 bond to raise up to 600 million euros
* To sell merchant acquiring unit for 300 million euros (Adds detail, CEO comment)
ATHENS, March 16 (Reuters) - Piraeus Bank plans a capital boost of about 1 billion euros ($1.2 billion) through a share placing with institutional investors, the Greek lender said on Tuesday as it reported that it had swung to a loss last year.
Piraeus, which is 61.3% owned by the Hellenic Financial Stability Fund (HFSF), said the planned equity offering will reduce the stake held by Greece’s bank rescue fund to a minority shareholding without any blocking power.
The Greek bank said in a statement that it had also signed a binding agreement to sell its merchant acquiring unit to Euronet Worldwide for 300 million euros.
“In 2020 we managed to navigate a number of headwinds, achieving significant milestones that set the foundations of the next day for Piraeus Bank,” CEO Christos Megalou said, adding the bank was now taking another major step to derisk its balance sheet and enable it to focus on funding the Greek economy.
Piraeus added that it had struck a deal with global investor Christofferson Robb & Co (CRC) to securitise performing small business and corporate loans, in a so-called synthetic securitisation, which it said is a first in the Greek market.
The target size is about 2 billion euros of risk-weighted assets in two transactions. The first of about 800 million euros was signed on 11 March 2021 with CRC and a second one for about 1.2 billion euros is scheduled later this year.
Piraeus said the implied positive capital impact from the two transactions is about 400 million euros. It may also issue a Tier-2 bond to raise up to 600 million euros.
The bank plans to speed up the reduction of impaired credit with further securitisations with a gross book value of 11 billion euros that will make use of the government’s bad loan reduction scheme.
Piraeus said it had swung to a net loss from continued operations of 652 million euros in 2020, versus a profit of 270 million euros in 2019. ($1 = 0.8407 euros) (Reporting by George Georgiopoulos; Editing by Alexander Smith)