BUSINESS

Bank shares on wild ride amid test fears

The overall uncertainty regarding how Greek banks will emerge from October’s stress tests to be conducted on all EU banks has fueled a summer of distress and fluctuation for local banking stocks.

Last week, the banks index at the Athens bourse rose 6 percent after sector officials and market analysts discredited reports claiming Greek banks would need capital injections to remain on sturdy capital ground.

The rebound followed a major loss of ground by bank shares in previous weeks, their values plummeting on news they would likely need capital support. Compared to recent peaks struck, National Bank and Eurobank both fell 38 percent, Piraeus slipped 31 percent, and Alpha retreated 19 percent.

The sharp decline forced the Capital Market Committee to intervene and seek explanations from the banks.

Late last week, Greek banking officials said the reports claiming local lenders would need capital support were groundless, adding that traders were taking full advantage of unclear conditions. Morgan Stanley and JPMorgan also stepped in with positive reports stating that Greek banks stood on solid ground.

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