National Bank of Greece (NYSE:NBG) has offered to repurchase its U.S.-listed ADS preference shares, the largest Greek lender said in an SEC filing. The bank will buy back 22.5 million of the total 25 million outstanding American Depository Shares for $12.50 each or $281 million. That will be a 50 percent discount to the nominal value of shares, a senior official at the National Bank of Greece (NYSE:NBG) told Reuters.

National Bank of Greece

Each ADS equals one preference share of the bank. The repurchase will increase the National Bank of Greece (NYSE:NBG)’s Core Tier 1 capital by $228 million (175 million euros), if all the securities are tendered. The struggling bank hasn’t paid dividends on its preference shares since March 2011, and is unlikely to pay for FY2012.

A lot of investors were confused earlier this week over its share prices as various Web-based quoting systems showed different prices. The huge jump in prices, which caused confusion, was equal to a 1:10 reverse stock split. Shares had declined 479.51 percent to $7.07. National Bank of Greece (NYSE:NBG) has recently been arranging finances to boost its capital levels to escape the tag of a “defunct bank.” Now shares are up for real today.

On May 24, the bank reported a profit of 27 million euros in the first quarter, up from the net loss of 731 million euros in the corresponding period a year ago. National Bank of Greece (NYSE:NBG) was helped by provisions for bad debts, lower funding costs and better than expected performance of its Turkish subsidiary Finansbank. Loan loss provisions were down from 505 million euros to 428 million euros.

National Bank of Greece Recapitalization

A few weeks ago, the National Bank of Greece (NYSE:NBG) approved a recapitalization plan worth 9.75 billion euros ($12.7 billion). The capital raised from the stock offering will be used to improve the solvency ratio of the central bank. The improvement in Greece’s macroeconomic conditions and the recapitalization pushed Fitch Ratings to upgrade National Bank of Greece (NYSE:NBG)’s ratings to B- from CCC.

National Bank of Greece (NYSE:NBG) shares were up 11.60 percent to $7.89 at 11:57 AM EDT.