EU Approves 2.72 Billion of State Support for Piraeus Bank

BRUSSELS—European Union regulators have approved €2.72 billion ($2.88 billion) of state support for Greek lender Piraeus Bank, saying the payment didn't violate EU rules on government aid for companies.

Greece's government plans to inject that sum into the nation's largest lender to companies and households after a capital-adequacy assessment by the eurozone's single banking supervisor identified a shortfall of €4.93 billion for Piraeus Bank.

The bank managed to raise around €2.2 billion from private investors and additional capital actions, leaving around €2.72 billion to be covered by the Greek government's Hellenic Financial Stability Fund. That funding is to be provided by the eurozone's bailout fund, the European Stability Mechanism, as part of the nation's latest bailout program.

In a statement on Sunday, EU antitrust chief Margrethe Vestager said the "significant" amount raised from private investors was a welcome "sign of market confidence" in the bank.

"The additional public support and further implementation of its restructuring plan should enable the bank to return to long-term viability and continue supporting the recovery of the Greek economy," Ms. Vestager said.

To secure the additional funding, Greek authorities proposed changes to an earlier restructuring plan for Piraeus Bank that includes deeper operational restructuring and a commitment to dispose of more non-core assets outside Greece.

Those measures, the commission said, were "sufficient to limit distortions of competition as a result of the state aid."

Write to Tom Fairless at [e-mail]

Subscribe to WSJ: http://online.wsj.com?mod=djnwires

(END) Dow Jones Newswires

November 29, 2015 20:25 ET (01:25 GMT)

Copyright (c) 2015 Dow Jones & Company, Inc.