National Bank of Greece (NBG) has announced plans to sell its Turkish subsidiary Finansbank in order to cover capital shortfall.

The move comes after stress tests conducted on the bank by the European Central Bank (ECB) revealed a capital gap of EUR4.6bn under an adverse scenario.

According to the stress test results, four Greek banks including Alpha Bank, Eurobank, National Bank of Greece and Piraeus Bank had a deficit of EUR14.4bn under the adverse scenario, and a capital shortfall of EUR4.4bn under a baseline scenario of normal prevailing economic conditions.

NBG plans to meet the baseline as well as the adverse scenario capital deficit through the 100% sale of Finansbank, which has a tangible book value of EUR3.4bn.

"In connection with the preparation and submission to the competent regulatory of its restructuring and its capital plan required by the recapitalization framework, the Bank announces that it intends to proceed, subject to customary regulatory and corporate approvals, with the disposal of its entire stake in its Turkish subsidiary, Finansbank," NBG said in a statement.

The bank has not yet disclosed any information regarding the potential buyers or timeframe for the deal.

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