ATEbank fails ECB stress test

ATEbank was the only Greek lender to fail the European Central Bank stress tests, according to results released yesterday, but this may well trigger other developments in the domestic banking sector. The state-owned bank saw its capital adequacy index drop to below the 6 percent mark, as its Tier 1 level was found to be just 4.36 percent. It was one of the seven lenders across the European Union to fail the stress tests among the 91 that went through the process of examining their survival capacity should crisis conditions worsen. Piraeus Bank marginally scraped through with exactly 6 percent, while the other four Greek banks passed with relative ease: National Bank had 7.4 percent, Eurobank EFG 8.17 percent, Alpha Bank 8.22 percent and Hellenic Postbank 10.1 percent. The two Cypriot lenders also passed – Marfin Popular Bank having 7.14 percent and Bank of Cyprus registering 8 percent. For National, the worst-case senario saw that even with provisions of 5.1 billion euros in the 2010-11 period, its profits before provisions would absorb most of the problems suggested by the test. Banks that have failed the stress test must now proceed with a share capital increase and ATEbank is already making plans in that direction. The Finance Ministry made it clear that the state, the lender’s main shareholder, will participate in the increase, after obtaining the European Commission’s approval, it stated yesterday. «The Finance Ministry has already contacted the European Commission agencies to ensure that the terms and conditions for the measures required toward this end comply with European Union regulations about state subsidies,» the statement read. Finance Minister Giorgos Papaconstantinou cast a positive light on developments, suggesting that the domestic banking system is in good health, as the recent tests have confirmed. «The results are positive and show that the Greek banking system can respond to even harsher conditions than those now. With the recapitalization program and the Credit Stability Fund, the government has created adequate support mechanisms for the credit system and Greek economy. «Greek banks are now invited to themselves assess the results and proceed with the actions and strategic moves that will strengthen their capital adequacy and bolster them within the context of the restructuring of the Greek banking system,» the minister stated. Earlier today, when asked whether the state would approve of the sale of its stake in ATEbank to Piraeus Bank, which has bid for it, Papaconstantinou said, «Everything is open; the government is examining all possible scenarios.»

Subscribe to our Newsletters

Enter your information below to receive our weekly newsletters with the latest insights, opinion pieces and current events straight to your inbox.

By signing up you are agreeing to our Terms of Service and Privacy Policy.