ATHENS (Reuters) - Greece's third-largest lender Eurobank (>> Eurobank Ergasias SA) became its first bailed-out financial institution to return to private control on Tuesday after raising 2.86 billion euros (2.34 billion pounds) from international investors.

Eurobank's share offer to plug a capital hole was oversubscribed and priced at 0.31 euros a share, said Greece's bank bailout fund HFSF, whose 95 percent stake will fall to about 35 percent after the deal.

Growing confidence that bailed-out Greece is turning the corner towards recovery has helped its top banks tap international markets via share and bond issues and raise 7.06 billion euros so far.

"The successful completion of Eurobank’s capital increase constitutes a vote of confidence to the prospects of our bank and of the Greek economy," Eurobank CEO Christos Megalou said in a statement. The share issue was three times subscribed by foreign and 1.4 times by domestic investors, a banker close to the deal said on condition of anonymity. Barclays (>> Barclays PLC), Deutsche Bank (>> Deutsche Bank AG) and JP Morgan (>> JPMorgan Chase & Co.) led the bookbuilding aimed at international investors. Eurobank peers Alpha (>> Alpha Bank S.A.) and Piraeus (>> Piraeus Bank SA) last month raised 2.95 billion euros between them through equity offerings, and Greece's largest lender by assets National Bank (>> National Bank of Greece) is planning a 2.5 billion euro cash call next month.

All of Greece's four major lenders had to be rescued by the HFSF, which has been endowed with 50 billion euros out of the country's EU/IMF bailout and has spent about 39 billion euros on the task so far. Eurobank had already secured a commitment by a group led by Canada's Fairfax (>> Fairfax Financial Holdings Ltd) to anchor investors in the share sale and take up 47 percent of the issue at 0.30 euros a share. The group raised its bid to 0.31 euro on Monday. [ID:nL6N0N71OR] The group further includes Capital Research and Management, Wilbur Ross, Fidelity, Mackenzie and Brookfield. Fairfax and Wilbur Ross have committed to hold on to the shares for at least six months and participate in management. "We are satisfied that Eurobank's offering attracted substantial capital from quality investors, including long-only funds and Sovereign Wealth Funds," HFSF Chairman Christos Sclavounis said.

"Management has made a great effort over many months in sustaining strong investor interest in the transaction, as evidenced by a very strong result". With the full 2.86 billion euros from markets, the HFSF bailout fund will not have to dip into its remaining 11 billion euro capital buffer to support the lender. The fund waived its rights to the share issue.

Barclays, Deutsche Bank and JP Morgan acted as joint coordinators for the deal.($1 = 0.7223 Euros)

(Reporting by George Georgiopoulos; Editing by Harry Papachristou/Mark Heinrich)