ATHENS: Greece's small troubled lender FBBank has been split into "good" and "bad" parts, with the healthy business absorbed by Greece's largest lender National Bank (NBG), the central bank said on Saturday.
Hit by rising bad debts and losses from government bond write-downs, Greek banks have been consolidating to cope with a deep recession, now in its sixth year, and lack of access to wholesale funding markets.
Banking sources told Reuters on Friday that FBBank would be wound down as part of a wider restructuring of the banking sector stemming from the country's debt crisis.
FBBank, majority owned by the family of Greek shipowner Victor Restis, operates 19 branches in the country that will be taken over by National Bank as of May 13. It reported total assets of 1.6 billion euros ($2.1 billion) in 2011.
The bank, with a market share of less than 0.5 percent in terms of assets, had informed the Bank of Greece that it was not able to raise the funds required for its recapitalisation, the central bank said in a statement.
FBBank had sought to raise 168 million euros through a rights offering that ended on April 26.
A state bank rescue fund, the Hellenic Financial Stability Fund, is set to recapitalise the country's four systemic banks, National Bank, Alpha Bank, Piraeus bank and Eurobank.
"With the absorption of the healthy part of FBBank, the bank's depositors and clients are fully guaranteed," NBG said in a statement. The bank said its participation in the restructuring of the credit system would not affect its ongoing capital increase process.
Greece's four major banks, including NBG, need 27.5 billion euros in new capital to restore their solvency ratios to levels required by the country's central bank after incurring losses from debt writedowns and impaired loans.
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