Clean bill of health for Greek banks from stress tests

Greek banks received what amounts to a virtually clean bill of health from the European Central Bank, as the results of the stress tests Frankfurt performed on the four systemic lenders of this country showed on Sunday that Alpha and Piraeus have completed the exercise successfully through their dynamic picture, and only Eurobank and National need to cover the negligible amount of 291 million euros in total.

“Eurobank has practically no shortfall and National Bank of Greece has no shortfall,” read the ECB statement on Sunday afternoon.

The results are not only a major boost for the local credit sector, but also for the government as they allow it to handle the reserves of about 11.3 billion euros at the Hellenic Financial Stability Fund for alternative purposes, such as the reduction of the national debt.

Piraeus Bank showed capital needs of 660 million euros according to the data up to December 31, 2013, but the restructuring plan that the bank has submitted and partly implemented already cover all of its needs, according to Reuters.

National Bank announced that its capital needs based on its static picture (end-2013 data) amounted to 3.43 billion euros, but its plan on restructuring its assets and operations has diminished its requirements to just 273.28 million euros. This will likely be covered by the sale of shares in Finansbank, National’s Turkish subsidiary.

Eurobank announced that its original deficit, calculated using the end-December 2013 picture, came to 4.63 billion euros, but following its share capital increase of 2.86 billion euros and the restructuring plan submitted, its requirements amount to no more than 17.55 million euros.

Alpha has not only passed the stress test with its Core Tier 1 index at 8.1, but it has also found itself among the top 20 percent of the 123 banks across Europe that took part in the exercise of the ECB.

A total of 25 European banks have failed the stress test of the European Banking Authority (EBA), the ECB announced, but 12 of them have already covered their requirements through measures taken during this year. The total amount of the capital requirements according to the dynamic picture of the remaining lenders across the eurozone amounts to some 10 billion euros.

Three Cypriot lenders showed combined capital needs of 2.4 billion euros.

The eurozone banks that failed the tests have got two weeks to present their plans to cover their requirements within the next nine months.

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