Greece's four biggest banks are seeking as much as 5.4 billion euros ($7.1 billion) from the European Central Bank's first auction of cash aimed at boosting loans to companies and households, according to people with direct knowledge of the plans.
National Bank of Greece SA, the country’s biggest bank, is bidding for 1.6 billion euros, according to a spokesman. Piraeus Bank SA, the nation’s second-biggest lender, is seeking 2.75 billion euros in the September auction, according to a senior executive, who asked not to be identified because the information isn’t public.
The loans, known as targeted longer-term refinancing operations, or TLTROs, are part of a package of ECB measures to expand credit to individuals and businesses to revive growth. In Greece, lending to the private sector fell an annual 3.7 percent in July, after falling by 3.5 percent in June, according to Bank of Greece data.
“What is important for TLTRO is to inject additional liquidity to the system,” said Paris Mantzavras, an analyst at Pantelakis Securities. Greek banks are restrained in their borrowing because of limited collateral that is eligible for TLTROs, he said.
To participate in the first auction, banks were due to submit data on their loan books to their national central banks by 3:30 p.m. local time on Thursday. A second auction will follow in December.
ECB Executive Board Member Benoit Coeure said on Thursday that lack of eligible collateral is a consideration for Greek banks.
“We are discussing together with the Bank of Greece in which way they could be constrained by their access to collateral,” he said in an interview in Athens on Thursday with Greek broadcaster Skai TV.
Eurobank Ergasias SA, the third-largest lender, has bid for 1 billion euros, another person said.
Officials at Eurobank and Piraeus declined to comment.
Alpha Bank SA, the fourth-largest lender, isn’t bidding at the September auction, and may participate in December’s auction, said Chief Financial Officer Vassilios Psaltis. The lender has 1.8 billion euros of eligible collateral.
“We’re at no rush at this point in time to participate since the new disbursements are only few,” Psaltis said on a conference call on Thursday. Should demand for credit increase and gross domestic product improve, “it would be more appropriate to explore this option” at the end of the year, he said.