Banif Bank Malta has reacted positively to a recapitalisation plan announced by Banif Group.

The group submitted the plan for approval at its next general meeting on January 16.

Banif Malta said the recapitalisation would make Banif one of the most capitalised banks in Europe. Banif Financial Group would bring its capital adequacy levels to the new Capital Requirements Directive and Regulations coming into force in 2013 and up to December 2019.

The plan, approved by the Portuguese regulators and authorities, formed part of a wider strategy by the Portuguese government to ensure that banks had adequate capital in line with the capital requirement regulations imposed on Portuguese banks.

Banif Malta said it was not been affected by the group's restructuring programme since it operated independently within the Maltese financial services framework. .

In a statement on its website, the group said that, once approved, the plan will be implemented in two stages.

The first will be an initial public investment of €1,100 million. This will be followed by an additional share capital increase, to be made by the end of June, to the tune of €450 million, with subscription through a public offer on conditions yet to be defined.

The recapitalisation process is based on interim support of the state for a maximum of five years and involves an aggressive process of restructuring of the business model and enhancement of its core segments of activity.

The recapitalisation of Banif is also subject to a European Commisasion decision that this is in compliance with state aid rules.