Thursday Jul 24, 2014 Search
Weather | Athens
32o C
23o 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)  
Eurozone bonds yields rise on strong data, dulling QE prospects
PPC approves $243 million wind investment in Greece
No property transactions for tax evaders
IOBE warns crisis will return if reforms are not implemented
Boutaris plans Islamic art museum for Thessaloniki
Thessaloniki Mayor Yannis Boutaris on Thursday announced plans to establish a museum of Islamic art in Greece’s northern port city. Boutaris, who was re-elected in May, told Kathimerini he h...
Activists launch flotilla against Syria chemicals
Nearly 40 activists from Greece and Italy plan to launch a flotilla from the port of Hania on Crete on Friday to protest the decommissioning of Syria’s chemical weapons stockpile in the sea ...
Inside News
TRACK & FIELD
Athens, the Marathon capital of the world for good
Paco Borao, the man who restored Athens as the Marathon capital of the world with the establishment at the Olympic Sports Center of the headquarters of the International Association of Marat...
TRACK & FIELD
Pole vault record on same day as three doping cases
Greek track and field had a mixed weekend, as on the same day as Katerina Stefanidi matched the national record in pole vault as well as the leading result in Europe so far this season, thre...
Inside Sports
COMMENTARY
When evaluation is seen as useless
The reactions toward the government’s plans for an evaluation of public sector workers are completely unsurprising. Civil servants – and not just the unions that represent them – abhor the m...
EDITORIAL
Playing the good guy
There is a part of the government that is striving to fulfill the commitments that Greece has undertaken toward its foreign creditors, most of which pertain to reforms that are absolutely es...
Inside Comment
SPONSORED LINK: FinanzNachrichten.de
SPONSORED LINK: BestPrice.gr
 RECENT NEWS
1. Boutaris plans Islamic art museum for Thessaloniki
2. Activists launch flotilla against Syria chemicals
3. Greek leaders mark 40th anniversary of the fall of the junta
4. Policeman among other eight arrested for antiquities trafficking
5. Council of State deems university reform plan legal
6. FYROM´s foreign minister does not see progress in name talks
more news
Today
This Week
1. Quadriplegic woman on life support 'dies due to unpaid power bills'
2. Democracy 'retreated' during crisis, says Papoulias
3. Efforts continue on Crete to find 'Sifis' the crocodile
4. Family of deceased woman on life support says application for 'special status' had been filed with PPC
5. Medical assistance for Acropolis visitors
6. Presidential election will not lead to snap elections, Samaras tells ND deputies
Today
This Week
1. The cost of excellence
2. Ex-Credit Suisse banker taps lesson for Greek rebound
3. Greece seen in third bailout as bonds not enough, economists say
4. Climber dies in Mount Olympus fall
5. Greek banks able to tap investors after stress tests, HFSF Says
6. Greek sovereign debt at 174.1 percent of GDP in first quarter
   Find us ...
  ... on
Twitter
     ... on Facebook   
About us  |  Subscriptions  |  Advertising  |  Contact us  |  Athens Plus  |  RSS  |   
Copyright © 2014, H KAΘHMEPINH All Rights Reserved.