ATHENS (Reuters) - Greece's Piraeus Bank (>> Piraeus Bank SA) has agreed to absorb the healthy part of small cooperative lender Panellinia after it failed to plug a capital gap, two banking sources told Reuters on Friday.

"The deal has closed, Piraeus agreed to take over the healthy part of Panellinia," one of the bankers said, declining to be named.

Greece's banking sector has gone through a phase of consolidation in the last years to deal with the fallout from the country's debt crisis.

Its four main lenders -- National (>> National Bank of Greece), Piraeus, Eurobank (>> Eurobank Ergasias SA) and Alpha Bank (>> Alpha Bank S.A.) -- now account for about 95 percent of the industry after taking over smaller players.

Panellinia, whose shareholders include German cooperative lender DZ Bank, has not found investors to plug a capital need of about 170 million euros (113 million pounds) to bring its capital adequacy in line with regulatory requirements.

Panellinia, with assets of 749 million euros, deposits of 514 million and equity capital of 50 million, runs a network of 26 branches.

Piraeus Bank has a successful track record of absorbing smaller lenders, including the healthy part of ATEbank, the Greek operations of Cypriot banks and Portuguese lender Millennium BCP's Greek unit.

(Reporting by George Georgiopoulos; Editing by Keith Weir)