The losses that Attica Bank, Greece’s fifth largest lender, is expected to record at the end of the 2016 financial year will trigger a legal clause for the coverage of the bank’s deferred tax assets by the Greek state via a compulsory share capital increase.
This follows a recent amendment to a law introduced by former finance minister Gikas Hardouvelis in 2014, and the size of the share capital increase will depend on Attica’s final result of 2016.
While speaking to shareholders on Wednesday, Attica’s chief executive officer Theodoros Pantalakis estimated that 2017 will be marginally positive for the troubled lender, while the results of its streamlining process will become more evident from 2018.
His estimate for 2017 is based on achieving a cost reduction of 25 percent mainly through the signing of new collective labor contracts and savings of some 4 million euros in expenditure via a voluntary exit program for 86 employees. The bank’s revenues are expected to grow 10 percent next year mainly thanks to commissions, and there will be a small increase in loan issues, estimated at around 100 million euros.
Pantalakis added that by the end of the year the bank will have covered a part of the deposit outflow of previous months.