Credit sector officials sleeping easy ahead of stress test results

Analysts, investment banks and institutional investors appear optimistic regarding the results of the European Central Bank stress tests on local lenders, which has been mirrored in the performance of bank stocks so far this week. The message is that they expect the capital requirements to be announced this Sunday to be small and manageable.

National Bank chief executive Alexandros Tourkolias spoke at a conference on Tuesday about the lender’s capital adequacy and the upcoming result announcement, stressing that, “given what we’ve got so far, we can sleep quietly.”

Since last Wednesday’s bourse closing, following the big losses in the stock and bond markets, bank stocks have rallied on market optimism: National’s stock has grown 17.84 percent, Eurobank added 16.94 percent, Piraeus expanded 15.45 percent and Alpha has risen by 12.83 percent.

On Thursday the ECB will inform the managements of domestic banks about the level of their capital needs revealed by the exercise, while the results will be published three days later.

A significant boost is expected from the acknowledgement of the deferred tax credits, which could add up to 2 billion euros. It remains unclear to what extent the ECB will take the deferred tax assets into account, but according to sources the Greek side has managed to curb Frankfurt’s resistance and local lenders will enjoy exactly the same treatment as their counterparts in other countries on this matter.

Subscribe to our Newsletters

Enter your information below to receive our weekly newsletters with the latest insights, opinion pieces and current events straight to your inbox.

By signing up you are agreeing to our Terms of Service and Privacy Policy.