Greece’s banks have begun lobbying the bodies behind the country’s bailout in a bid to ease the conditions imposed on their recapitalisation and avoid full nationalisation.

Under the terms of Greece’s €172 billion international bailout – backed by the European Commission, European Central Bank and the International Monetary Fund – €27 billion is to be injected into the big four lenders, with a further €2.5 billion to be supplied by private sector investors. But it is proving difficult to attract that private sector money, given a tight April deadline and equity valuations seen as unrealistic by some analysts.

The big four banks together hold negative equity of about €8 billion. “New investors aren’t willing to pay for yesterday’s losses,” said Nikos Karamouzis, deputy chief executive at Eurobank.

“If you want to attract private capital, you have to re-examine the terms.”

According to bankers and analysts, no serious fund management companies, and only a handful of hedge funds, have shown any interest in buying equity in Greece’s top banks: National Bank of Greece, which is midway through a merger with Eurobank; Alpha Bank; and Piraeus Bank.

“At this point we see little interest from international institutional investors to participate in the recapitalisation under the current structure,” said Antonio Ramirez, analyst at Keefe, Bruyette Woods.

If investors fail to appear, the banks risk being fully nationalised, with the Hellenic Financial Stability Fund (HFSF), the Greek body that is administering the bailout money on behalf of the troika, taking control.

Bankers complain that the terms of the recapitalisation, set last summer, valued the banks’ equity at a multiple of between one and two times their book value at a time when most banks across Europe are trading at a fraction of that price.

– (Copyright 2013 The Financial Times Limited)