Saturday December 20, 2014 Search
Weather | Athens
17o C
10o 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)  
Workers rush to get early retirement
Piraeus Containter Terminal goes from strength to strength
Moscovici: Creditor inspections to become less frequent and ‘lighter’
Property capital gains tax halt
Tsipras admits there could be hard days ahead
SYRIZA leader Alexis Tsipras said on Friday that he is determined to implement his party’s economic program if it comes to power but admitted that it would experience a challenging period. “...
Public medical centers keeping up despite shortages
Despite having just 1,050 doctors, medical centers belonging to Greece’s public health system (PEDY) saw more than 200,000 regular and emergency patients, made over 3,500 house calls and iss...
Inside News
BASKETBALL
Explosive Barca unfazed by Panathinaikos, bomb scare
Panathinaikos lost 80-67 at home to Barcelona on Friday in a rather meaningless game at the end of the first group stage of the Euroleague, but the encounter will be remembered for the bomb ...
SOCCER
Abidal cuts short playing career at Olympiakos
Former France and Barcelona defender Eric Abidal announced his retirement from football on Friday, a day before his last match. Abidal said he will finish after playing for Olympiakos agains...
Inside Sports
COMMENTARY
New weapons of diplomacy
Hollywood screenwriters couldn’t make it up: That Sony, one of the world’s biggest film producers, would be forced to pull a comedy about the assassination of North Korea’s dictator after a ...
EDITORIAL
Oblivious to change
The world around us is undergoing many important changes while we sit around stewing in our own juices. US President Barack Obama is actually talking with Cuba’s Raul Castro, for example, bu...
Inside Comment
SPONSORED LINK: FinanzNachrichten.de
SPONSORED LINK: BestPrice.gr
 RECENT NEWS
1. Explosive Barca unfazed by Panathinaikos, bomb scare
2. Tsipras admits there could be hard days ahead
3. Public medical centers keeping up despite shortages
4. Workers rush to get early retirement
5. Piraeus Containter Terminal goes from strength to strength
6. Moscovici: Creditor inspections to become less frequent and ‘lighter’
more news
Today
This Week
1. Ship with 200 migrants off Pylos towed to Italy after passengers refuse to stop in Greece
2. Independent Greeks MP Haikalis claims attempted bribery for presidential vote
3. Greek PM Samaras confronts peril putting his Greek transformation to vote
4. Independent Greeks leader backs MP's bribery claims, threatens to release video [Update]
5. Former premier Mitsotakis to meet President Papoulias to discuss political upheaval
6. Gov't spokeswoman says bribery claims 'badly-played charade,' heralds legal action if evidence not produced
Today
This Week
1. Juncker warns Greeks against voting 'extreme forces' into power
2. Romanos and the dilemma
3. Samaras summons bond vigilantes with euro exit talk
4. A friendly yet firm message from Pierre Moscovici
5. Europe's drama in Greece needs final act to avoid tragedy
6. High stakes
   Find us ...
  ... on
Twitter
     ... on Facebook   
About us  |  Subscriptions  |  Advertising  |  Contact us  |  Athens Plus  |  RSS  |   
Copyright © 2014, H KAΘHMEPINH All Rights Reserved.