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Crédit Agricole pumps cash into Greek subsidiary

Greece's Emporiki Bank on Wednesday said it had received a €2 billion ($2.6-billion) injection from its French parent group Crédit Agricole to "fortify" its position during a state debt writedown.

“Crédit Agricole has covered in cash an approximately two-billion-euros share capital increase, aiming at reinforcing the bank’s capital structure,” Emporiki said in a statement.

“The increase will further fortify Emporiki’s competitive position in the domestic market,” the lender said, adding that it had already made the necessary provisions in its third-quarter results for the forthcoming  ‘haircut’ of Greek government bonds, a move designed to alleviate the country’s huge debt.

A eurozone lifeline accorded to debt-ravaged Athens in late October includes a 50-percent writedown on the country’s short and medium-term debt in agreement with banks.

Eurozone leaders decided to accord Greece a new loan of €130 billion of which 30 billion will be used to recapitalise banks hit by losses owing to the debt rollover.

Emporiki Bank, Greece’s fifth largest, had posted a net loss of €610.6 million in the first half of 2011.

Acquired by Crédit Agricole in 2006, Emporiki has branches in Greece and subsidiaries in Albania, Bulgaria, Romania and Cyprus.

It recently took action to bolster its subsidiaries in Albania and Bulgaria with share capital increases.