Attica Bank was granting loans which, in their majority, became nonperforming ones (NPLs), despite instructions to the opposite effect by the Bank of Greece (BoG), at a time when its deposits were shrinking, according to an inspection conducted jointly by the BoG and the European Central Bank’s Single Supervisory Mechanism.
Kathimerini understands that since December 31, 2014, Attica Bank has granted loans of more than 400 million euros – 60 percent of which are now NPLs – even though its deposits had shrunk by more than 1.2 billion euros. NPLs in Greece currently total around 100 billion, of which 2.2 billion euros come from Attica Bank.
The BoG had reportedly requested that Attica Bank not approve loans of more than 100,000 euros without its permission. During 2015, the bank granted loans of more than 250 million euros. Kathimerini understands that most of these were granted to specific business sectors – ranging from 10 million to 40 million euros. The finding is all the more dazzling given that during the same period total loans to businesses and households plummeted by 8 billion euros.
Moreover, deposits at Attica shrunk from 3.25 billion to 2.14 billion euros in 2015 – down 34 percent – while, at the same time, it increased loans by a further 250 million euros (10 percent).
Meanwhile, the BoG is said to be just a step away from installing a commissioner at Attica Bank, as the engineers’ pension fund (TSMEDE) – the bank’s main stakeholder – was refusing to full comply with its instructions.
Even though Attica Bank’s board of directors has appointed Theodoros Pantalakis as its new chief executive, who enjoys the confidence of the BoG, TSMEDE wants to be represented on the board by its president Konstantinos Makedos – a choice the BoG has rejected.
The BoG is adamant that the new board must be selected according to purely technocratic criteria, and sources from the central bank have stressed that if this does not happen at today’s general meeting, monitoring measures will be activated with the installment of a commissioner, which would compromise Attica Bank’s independence.