* State-owned bank launches capital increase
* ATEbank failed EU stress test in July
* Announces 9-month loss of 117 million eur
(Adds details)
ATHENS, Nov 24 (Reuters) - Greece's state-owned ATEbank plans to boost its capital by 1 billion euros ($1.34 billion) to strengthen its balance sheet and buy back preferred shares from the state, the bank said on Wednesday.
ATEbank was the only Greek bank to fail a European stress test in July and the third major Greek bank to launch a capital increase since then. "ATEbank, in cooperation and with the support of its major shareholder, the Greek state, will proceed in the coming period to a share capital increase of 1 billion euros to strengthen the quality and quantity of its capital," it said.
ATEbank also announced a nine-month net loss of 117 million euros on higher loan-loss provisions.
Greek banks face a tough economic environment as government austerity policies to slash the budget deficit have deepened the recession at home, leading to a rise in non-performing loans.
In response, the government has called on lenders to rethink strategy and form stronger groups.
(Reporting by Ingrid Melander and Lefteris Papadimas; Editing by Erica Billingham)