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Cyprus bank Marfin takes big Greek writedown hit
Cyprus bank Marfin Popular takes $3.4 billion Greek writedown hit
By The Associated Press

NICOSIA, Cyprus (AP) ' Cyprus' Marfin Popular Bank said Wednesday that it's being courted by several strategic investors despite posting a huge loss of euro2.5 billion ($3.36 billion) for 2011 after taking a 60 percent writedown of its Greek government bond holdings.

The island's second largest lender said that it would need euro1.35 billion ($1.82 billion) to meet the required capital buffer of 9 percent, according to a capital raising plan submitted to regulators.

"The early indications from the results of our efforts are particularly encouraging confirming the strong foundations of our group," Bank CEO Christos Stylianides said in a statement. "Investor interest enhances further the confidence in the group's prospects."

The bank said interest from the unnamed investors would "be clarified over the next few months" so that it can meet the 9 percent capital threshold by June.

It said it also plans to raise cash from shareholders through a rights issue or private placement.

Discounting the writedown, the bank said it managed to make a profit euro338 million ($454.75 million) last year ' an increase of 3.2 percent over the previous year.

Marfin Popular is the most Greece-exposed of the island's three biggest commercial banks, holding Greek bonds with a nominal value of a little over euro3 billion ($4 billion).

The bank said its Greek bond writedown amounted to euro1.97 billion ($2.65 billion).

The Bank of Cyprus, the island's largest, last week posted an after-tax loss of euro1.01 billion ($1.34 billion) for 2011, after including a 60 percent writedown on its Greek government bond holdings.

That exposure of the large Cypriot banking system ' equivalent to six times Cyprus' euro18 billion ($24.2 billion) gross domestic product ' is primarily responsible for bringing the island's credit rating to near junk status.

That, in turn, effectively locked Cyprus out of international markets, forcing it to turn to Russia for a euro2.5 billion ($3.36 billion) low-interest loan to meet its financing needs for this year.

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