The results of the stress tests on Greek banks will apparently be quite manageable by the local credit sector, as Kathimerini understands that the lenders will need to draw some 5 to 6 billion euros from the private sector in order to avoid being nationalized.
Analysts’ converging estimates suggest that Alpha Bank will need a share capital increase of about 600-700 million euros, Eurobank will require 1.2 billion, National Bank will need 1.5 billion and Piraeus Bank will have the highest requirements, amounting to 1.7 billion euros. Such amounts are considerably lower than initial estimates, appearing manageable and creating expectations that all four banks will be able to draw the necessary funds from the market.
These figures have been calculated after the inclusion of the benefits that will derive from debt/equity swaps as well as the restructuring plans. In the case of National, its capital requirements have been calculated based on the sale of a 40 percent stake in Finansbank, as the original plan had provided for.
Using the asset quality review (AQR), the stress tests and the adverse macroeconomic scenario, the European Central Bank is set to announce two results regarding the amount of the capital requirements next week.
The first will be determined by the sum of the AQR and the baseline scenario, estimated to be close to 9 billion euros, while the second will be formed by the sum of the AQR and the adverse scenario, thought to be around 20 billion euros.
For the lenders to avoid being nationalized, they will need to draw sufficient funds from the market to cover the requirements of the first result from the AQR and the baseline scenario – i.e. a sum of about 5-6 billion euros, given the deduction of the benefits from the restructuring plans and the debt/equity swaps, estimated at 3-4 billion euros.
The additional requirements to stem from the second, adverse scenario will be covered by the state sector. To avoid a major decline in the state’s stake, the Finance Ministry is considering the coverage of 80 percent of the adverse scenario’s needs through convertible bonds (CoCos), and 20 percent through common shares with voting rights.