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Greek bank selling bonds: Would you buy?


Piraeus Bank, one of Greece's largest banks, is going to be the first bank in Greece to raise new capital on the markets since the start of the euro zone crisis.

The lender, which struggled after Greece's debt crisis exploded in 2009, resulting in two bailouts for the heavily indebted Mediterranean country, will tap the markets for 1.75 billion euros ($2.43 billion) in an effort to pass new tests on its financial stability. This will be an important test of investor sentiment towards the country, which has improved hugely since the European Central Bank President Mario Draghi promised to do "whatever it takes" to save the euro in 2012.

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The prospect of Greece leaving the single currency, which had been gaining credence in the market, seemed to have been removed by Draghi's statement.

(Read more: Greece hit by emerging markets fears)

Greece's central bank, the Bank of Greece, estimates that Piraeus needs a further 425 million euros to meet new European bank capital requirements, known as the Asset Quality Review.

There is still disagreement between the troika and the Bank of Greece on the total capital needs for the country's domestic banks, which also include National Bank, Alpha Bank and Eurobank. The troika believes it should be around 8.5-9 billion euros while the central bank thinks it should be lower, at 6.4 billion euros. Last summer, the biggest four banks were recapitalized to the tune of 28 billion euros.

(Read more: Mobius: I'm interested in Greece)

The troika-backed Hellenic Financial Stability Fund will have to step in if the banks cannot raise the money on the markets.

Greece is now categorized as an emerging market in the financial markets, and is grouped in the MSCI Emerging Markets index. While this may be embarrassing on one level, on another it means that Greece should perform better in relation to emerging markets rather than some of its more established European Union counterparts.

(Read more: Why Greece's emerging market status may be a good thing)

"Greece continues to outperform other emerging markets, driven by the cycle, correlation to euro zone, and valuations," HSBC emerging markets strategists, who have an overweight rating on the stock, wrote in a research note.

"The market is heavily under-owned. Looking bottom-up, we like the consumer and power sectors. Top-down, there appear decent prospects for positive earnings revisions."

- By CNBC's Catherine Boyle. Twitter: @cboylecnbc.