Thursday May 28, 2015 Search
Weather | Athens
14o C
09o C
News
Business
Comment
Life
Sports
Community
Survival Guide
Greek Edition
Greece’s return to bond market eased by banks, Provopoulos says

Nikos Chrysoloras & Christos Ziotis

Greek lenders’ success last month in raising funds from foreign investors shows the government can reach its goal of returning to bond markets, said George Provopoulos, the country’s central-bank chief.

“The successful restructuring of the banking system and the recapitalization of banks from the market following the latest stress-test exercise have facilitated the way for the Greek government to tap the market,” Provopoulos, who is also a member of the European Central Bank’s Governing Council, said in an interview in Athens on Tuesday.

Piraeus Bank SA and Alpha Bank AE last month raised nearly 3 billion euros ($4.1 billion), mostly from foreign investors, to plug a capital shortfall the Bank of Greece identified in a stress test. Piraeus also sold 500 million euros of three-year bonds, in the first public debt sale by a Greek lender since 2009.

Greece won approval this month from euro-area members for an 8.3 billion-euro aid payment, the first disbursement from its bailout program since December. The government and European Union predict that Greece will emerge in 2014 from six years of recession.

Two other lenders, Eurobank Ergasias SA and the National Bank of Greece SA, need to raise 2.95 billion euros and 2.18 billion euros respectively, according to the national regulator’s stress test, which was based on an asset-quality review by BlackRock Inc.

Provopoulos, 63, said discussions between the central bank and Eurobank’s potential “anchor investors” are near completion, as the country’s third-biggest lender by assets prepares to raise the capital it needs through a private placement by the middle of next month.

The central bank is likely to approve the Eurobank deal, Provopoulos said. He declined to comment on the shortfall for National Bank of Greece, which is required to submit a capital- raising plan later this month.

As the Greek economy contracted for six straight years, non-performing loans ballooned to 31.7 percent of total lending at the end of 2013, according to data provided by the Bank of Greece. Provopoulos forecast that NPLs will peak at the end of 2014, “provided economic activity continues to improve as expected, with GDP rising modestly this year.”

Greek lenders are now among the best-capitalized in Europe, he added, citing the drop in ECB funding. “It will be further reduced as Greek banks continue to regain access to markets,” Provopoulos said.

The next challenge for the country’s financial system will be to bolster the economic recovery, Provopoulos said.

“Banks should now support the reorientation of the economy toward production of tradable goods, which will boost net exports and help generate sustainable growth,” he said.

Greek lenders will face renewed scrutiny in a euro-area asset-quality review and stress test being conducted by the ECB through October. The health checks are part of the ECB’s Comprehensive Assessment before it becomes the region’s bank supervisor in November.

“The Bank of Greece eliminated the excess supply in the Greek banking sector,” said Provopoulos, who has shuttered 12 banks during his tenure. “We designed and implemented a pioneering resolution law, and now this is also happening at the European level.”

Greek lenders “most probably” won’t have to use reserves from the country’s bank-recapitalization fund, which currently stands at 11 billion euros, the central bank chief said. The fund maybe used to reduce Greek public debt if its still not been used in a year’s time, he added.

Asked to comment on his own future, Provopoulos said “the record of my performance is there for everyone to see and judge. It is up to the Greek Prime Minister to decide whether to renew my term,” which ends in June.

The Greek economy still faces challenges including deflation. Consumer prices calculated using a harmonized EU method dropped 0.9 percent in February from a year earlier for the 12th straight month of declines.

Euro-area inflation was 0.5 percent in March, well below the ECB’s goal of just under 2 percent, prompting President Mario Draghi to say policy makers are ready to use unconventional tools including quantitative easing if needed.

“We are reflecting on the design of a quantitative-easing program in the euro area,” he said. The Governing Council has “unanimously committed to using all instruments within its mandate, conventional and unconventional, to deal effectively with the risks of a too-prolonged period of low inflation.”

[Bloomberg]

ekathimerini.com , Wednesday April 9, 2014 (12:02)  
New measure to benefit tax dodgers
OTE planning to hire up to 500 employees
ENFIA to drop up to 30 pct this year
Drachma clause demands are a deja-vu for hoteliers
Athens, creditors offer conflicting views on negotiations
Prime Minister Alexis Tsipras said Wednesday that a deal with creditors was “close” and government officials said an agreement was being drafted but representatives of the country’s creditor...
Opposition presses PM over deal with lenders
Opposition parties urged Prime Minister Alexis Tsipras on Wednesday to seal an agreement with Greece’s lenders as soon as possible but also to inform them of what it plans to agree to. “What...
Inside News
SOCCER
Panathinaikos conquers PAOK through Tavlaridis goal
A Stathis Tavlaridis goal has brought Panathinaikos to practically within one point from clinching a spot in next season’s Champions League qualifiers, as the Greens made it three out of thr...
SOCCER
AEK Athens returns to top league after financial collapse
Greek club AEK Athens has just returned to the country's top soccer league, two years after financial collapse sent it to a lower league. One of the country's largest clubs, AEK sealed its s...
Inside Sports
COMMENTARY
Romantic notions meet reality
Before the elections, there was a considerable number of people who totally disagreed with the ideas and program put forward by SYRIZA, but they expected that the leftist party would, at lea...
EDITORIAL
Solving the Gordian Knot
The leftist-led government, as well as the country, have both been seriously damaged and exposed to risk from the evident indecision and repeated contradictions dogging the ongoing negotiati...
Inside Comment
SPONSORED LINK: FinanzNachrichten.de
SPONSORED LINK: BestPrice.gr
 RECENT NEWS
1. Panathinaikos conquers PAOK through Tavlaridis goal
2. New measure to benefit tax dodgers
3. OTE planning to hire up to 500 employees
4. ENFIA to drop up to 30 pct this year
5. Drachma clause demands are a deja-vu for hoteliers
6. ECB tells Athens to reach a deal
more news
Today
This Week
1. Some 300 mln left banks on Tuesday
2. Romantic notions meet reality
3. Target of Greek scorn shapes nation’s fate as IMF’s storm-chaser
4. The G-7's problem: Can the world deal with a Greek default?
5. Solving the Gordian Knot
6. FYROM PM blames Greece for name impasse
Today
This Week
1. Conspiracy madness
2. Hotel contracts with a ‘Greek default clause’
3. Neither Grexit nor a dual currency will solve Greece’s problems
4. No more 'quick and dirty' fixes for Greece
5. Merkel said to plan address for Greece if deal reached
6. Gov’t proposes bank transaction levy
   Find us ...
  ... on
Twitter
     ... on Facebook   
About us  |  Subscriptions  |  Advertising  |  Contact us  |  Athens Plus  |  RSS  |   
Copyright © 2015, H KAΘHMEPINH All Rights Reserved.