International investors will only participate in the share capital increases of local lenders on the condition that Greece completes the prior actions set by its creditors.
Kathimerini understands that the documents with which foreign investors are committing themselves to acquiring shares include an opt-out clause in case the Hellenic Financial Stability Fund (HFSF) does not gain access to the 10 billion euros required for its participation. This money is currently locked in an account of the Single Supervisory Mechanism (SSM) and its disbursement depends on the implementation of the prior actions.
In a visit to Athens this week European Commissioner Pierre Moscovici stated that the 10 billion euros is at Greece’s disposal but that its release is dependent on the reforms Athens is supposed to pass and the review by the creditors that will also unlock the bailout tranche of 2 billion euros.
Consequently, if the review is not successfully completed in time for the disbursement of the bailout installment and the 10 billion for the banks from the SSM, the overall project of the bank recapitalization will also run the risk of failure. If the process is not completed within 2015, the recapitalization may well inflict a haircut on Greek bank deposits above 100,000 euros.
Bank officials report major interest by foreign investors, adding that the atmosphere is as positive as it was in spring 2014, when banks performed share capital increases totaling more than 8 billion euros that were entirely covered by investors from abroad.
Senior officials from the credit sector attribute the increased investor interest to expectations of a Greek economic recovery after almost seven years of recession. They note that after the signing of the new bailout agreement and the very low valuations of banks based on their stock prices, the share capital increases have become very attractive. Bank stocks have declined by about 90 percent from the level they were at a year and a half ago, during the previous recapitalization.