By Yiannis Papadoyiannis
Despite the different approaches that the Bank of Greece and the country’s creditors have taken toward the assessment of local lenders’ capital requirements, the issue is closed as far as the country’s central bank is concerned, its governor, Giorgos Provopoulos, said on Thursday. The results of the stress tests are expected to be published by March 7.
Provopoulos’s statement served to confirm there is no chance of an increase to the requirements up to a total of 8 billion euros that the troika of representatives from the European Commission, the European Central Bank and the International Monetary Fund insisted on, so the estimated sum of the credit sector’s needs will not exceed 6 billion euros.
Provopoulos underscored that BlackRock Solutions’ examination of the data during this test involved a more in-depth analysis of local loan portfolios while also assessing the loan requirements of Greek lenders’ larger foreign subsidiaries. Furthermore, BoG commissioned Ernst & Young and Rothschild as independent consultants for the tests.
Bank officials told Kathimerini that the methodology followed by BoG for this test adheres to BlackRock’s findings regarding the potential losses banks could face due to nonperforming loans, and sticks to a strict approach on the assessment of favorable factors (operating profits, capital reserves, synergies, deferred tax etc).
National Bank sources claim that the BoG approach to its subsidiaries abroad was particularly harsh, placing additional burden on the group. National’s capital needs – expected to amount to 2 billion euros – reportedly stem from the bank’s subsidiary in Turkey and not from its portfolio of loans issued in Greece.
On Thursday the bank’s chief executive, Alexandros Tourkolias, met with Provopoulos to discuss the results of the stress tests, among other things. National sources added that the bank will cover its requirements through indirect synergies, without resorting to a share capital increase.