ECONOMY

Greek bank shares rally after positive ECB test outcome

Greek bank shares jumped more than 5 percent early on Monday, leading the broader equities market higher, after the European Central Bank’s health check turned out better than expected, traders said.

“We had a positive surprise, the market was not expecting such good news,» said Theodore Krintas, head of wealth management at Attica Bank. «The bottom line is that banks will not need new money, valuations are adjusting upwards.”

The Athens bourse’s banking index was gaining 5.5 percent at 0836 GMT to 149.4 points, outperforming the broader market’s 3.1 percent rise. Eurobank was adding 9.5 percent, with Piraeus Bank up 6.1 percent.

While the ECB’s test showed three banks with a capital shortfall based on a static view of their end 2013 balance sheets, only one – Eurobank – had a tiny gap after taking into account restructuring plans and capital raised after 2013.

[Reuters]