Saturday August 30, 2014 Search
Weather | Athens
31o C
24o C
News
Business
Comment
Life
Sports
Community
Survival Guide
Greek Edition
Greek rescue fund worried stress test delays may deter investors

By George Georgiopoulos

Leaders of Greece's bank rescue fund are worried that lengthy talks with foreign creditors over a health check of the top four Greek banks may put off investors looking to take part in the privatization of one of the country's biggest lenders.

Uncertainty over what capital needs the four lenders may face is holding back the privatization of No. 3 lender Eurobank that would be a vote of confidence for the battered sector and its prospects to return to private hands.

The four banks are undergoing a second round of stress tests to check if last summer's 28-billion-euro ($37.89 billion) capital injection has equipped them to absorb future shocks as bad loans keep rising.

But protracted talks with the troika of European Union, International Monetary Fund and European Central Bank inspectors have pushed back the outcome of the tests, which were expected early last month.

The Bank of Greece has held off releasing the results as the troika has not cleared whether the capital needs will be based on a baseline or adverse scenario that assumes two more years of recession, or whether the required capital ratio can be reduced to 8 from 9 percent.

"We have expressed our concerns over the delays on the outcome of the stress tests and the resulting capital needs for the systemic banks," Christos Sclavounis, chairman of the Hellenic Financial Stability Fund, told Reuters on Thursday.

The HFSF, funded by Greece's EU/IMF bailout package, covered 25 billion out of last year's recapitalization in return for shares in the four banks, becoming their majority owner.

National Bank, Piraeus Bank, Eurobank and Alpha Bank control about 90 percent of the country's banking market after a wave of consolidation and the winding down of smaller peers deemed non-viable.

The four banks will probably need additional capital after the health check is finalized, central bank chief George Provopoulos told parliament last month. He did not provide figures or identify which lenders may need funds.

"One immediate issue has to do with the recapitalization of Eurobank, which is in advanced stages of preparation," Sclavounis said. "Clarity on this issue should be positive for the market and for investors who are maintaining a keen interest to place funds in Greece."

Eurobank plans to issue 2 billion euros ($2.71 billion) worth of new shares to boost its capital by March and attract significant private ownership. It became 95 percent-owned by the HFSF after it failed to attract private investors in its recapitalization last year.

A successful sale of a significant chunk to investors would signal their trust that Greek banks are set to emerge from a severe debt crisis and a six-year depression, betting on the economy's recovery.

The rescue fund is also nudging the troika to clear an update of the existing recapitalization framework, keen for flexibility to proceed with Eurobank's share sale at market prices as the current framework lacks clarity.

"The lack of an adequate legal framework hinders the HFSF from fulfilling its mandate to preserve the value of its assets and facilitate their return to the private sector," HFSF CEO Anastasia Sakellariou told Reuters on Thursday. [Reuters]

ekathimerini.com , Thursday February 6, 2014 (13:32)  
Ministry launches work experience program for unemployed graduates
Tax burden in Greece among EUs heaviest, study reveals
Coalition bent on protecting weaker groups
Loaded agenda for Paris talks
New Democracy aims to ease tax burden, attack SYRIZAs policies as leaders Thessaloniki speeches near
New Democracy is to follow a two-pronged strategy in the coming days as it attempts to win over voters by pledging to tend to their tax concerns while also mounting a campaign to discredit S...
Infrastructure Minister assures officials over coastal revamp
A radical overhaul of the southern Athens coast at Faliro Bay will be put to tender in December, Infrastructure Minister Michalis Chrysochoidis said Friday at a meeting with officials from t...
Inside News
SOCCER
Tough draw for Greek sides in Europe League Greek stage
Following Thursday nights high, when all three Greek teams competing in the Europa League made it into the group stage of the competition, a harsh reality struck Friday as they found out wh...
JUDO
Greek judoka Iliadis triples up as Aguiar stuns Tcheumeo
Greek star Ilias Iliadis claimed his third world title in the under-90kg category in Chelyabinsk on Friday as Brazilian Mayra Aguiar and Colombian Yuri Alvear won gold in the womens under-7...
Inside Sports
ANALYSIS
Greek quest for debt relief faces hurdles in Paris
As Greek Prime Minister Antonis Samaras tries to follow Ireland and Portugal out the bailout exit door, he faces a month of bargaining. For a nation thats already gone through the biggest d...
COMMENTARY
Stifled dreams
At more or less the same time every year, we see the same images of high school graduates looking through the Education Ministrys lists of those who passed and those who failed the national...
Inside Comment
SPONSORED LINK: FinanzNachrichten.de
SPONSORED LINK: BestPrice.gr
RECENT NEWS
1. Ministry launches work experience program for unemployed graduates
2. Tax burden in Greece among EUs heaviest, study reveals
3. New Democracy aims to ease tax burden, attack SYRIZAs policies as leaders Thessaloniki speeches near
4. Coalition bent on protecting weaker groups
5. Infrastructure Minister assures officials over coastal revamp
6. Deadline for ENFIA tax pushed back to September 30
more news
Today
This Week
1. Strong undersea quake occurs off island of Milos, felt in Athens
2. Greek quest for debt relief faces hurdles in Paris
3. Dozens of migrants intercepted in the Aegean
4. Gov't jet carrying Venizelos back from Turkey conducts emergency landing
5. Rendi shootout leaves would-be hypermarket robber dead
6. Tight security in place for City of Athens ceremony as GD MP, supporters to attend
Today
This Week
1. Attack on gay couple in Athens leaves one man needing surgery
2. Purification rituals
3. The battle against progress
4. Thessaloniki mayor Boutaris sworn in wearing yellow star amid Golden Dawn protests
5. Athens finalizes Paris talks goals
6. Strong undersea quake occurs off island of Milos, felt in Athens
Find us ...
... on
Twitter
... on Facebook
About us  |  Subscriptions  |  Advertising  |  Contact us  |  Athens Plus  |  RSS  |   
Copyright 2014, H KAΘHMEPINH All Rights Reserved.