Galery

1

Senior managers of the four Greek systemic banks visited on Thursday the Bank of Greecein order to be informed of the results and forecasts of Blackrock related to the progress of bad loans.
 
This same procedure had been applied before the publication of the previous stress tests, the results of which were subsequently used to recapitalize the banks last year.

According to sources, representatives of the National Bank of Greece, Piraeus Bank, Alpha Bank and Eurobank were at the central bank yesterday whereas the meeting with Attica Bank and Panellinia Bank will take place today.

Experts in the industry note that initial talks about the results of the report of Blackrock were held at the meeting and the first reactions of the banks to the assessments of the American investment company were reported at them as well.

According to the same sources, it is necessary to discuss the matters with the management of the banks and to reach an agreement with them before the last round of negotiations with the Troika in order for the final conditions for the conduction of stress tests to be specified.

The confidential meetings between the management of the Bank of Greece and the bankers discussed the policy of forecasts that the banks follow and intend to continue to apply in the coming years to deal with overdue loans.

In addition to the study by Blackrock, the stress tests will take into account the business plans and the restructuring projects submitted by the Greek banks to the European Commission and the Bank of Greece, which show the internal accumulation of capital in the coming years through their operating profits and the liquidation of their assets.

It is noted that, in every case, the results will be announced after the final approval of the Troika whose leaders will arrive in Athens on Sunday.

Moreover, it is not excluded that the data that will be presented to the lenders will account for the changes in the indicators for the fourth quarter of 2013, which have not yet been published.

Banking experts emphasize that, based on the first signs, the total capital requirements will probably not exceed 5 billion euro for the entire banking system, noting that about half of this amount refers to Eurobank.

According to the same experts, Alpha Bank has adequate capital "cushions" that will allow it to pass the stress test without resorting to another increase in its own capital.

As for the National Bank of Greece and Piraeus Bank, they say that the possible capital shortfalls arising from the study by Blackrock will be subject to control by making forecasts and no increase in the capital through the issuance of new shares will be necessary this year.

It is expected that the results of the stress tests will be published in the first week of March at the latest.

Details

It seems that Alpha Bank is in the most favourable position in view of the preliminary results of the stress tests of the Bank of Greece, as it reports zero capital requirements.

Eurobank is at the opposite pole as its capital requirements amount to 2.7 billion euro that is the level forecasted by the bank’s management, which is planning to increase its share capital by 2.5 billion euro.

The capital requirements of the National Bank of Greece are in the range of 2.3 billion euro and those of Piraeus Bank have reached maximum levels.

This is clear from the initial results of the study by Blackrock, as they were presented yesterday to the heads of the four systemic banks in Greece by the technical teams of the central bank of Greece.

According to authorized sources, the capital requirements are calculated on the basis of the business plans submitted by the four banks to the Bank of Greece, taking into account the expected profit over the next three years.

According to banking experts, yesterday's meeting starts the procedure for calculating the capital requirements of the systemic banks, which takes place with the approval of the Troika, and will be completed after taking into account the results for 2013, other updated data and the forecasts obtained from the banks.

It is expected that the procedure will be finalized in the coming days and be approved during the upcoming visit of the Troika to Athens, which will begin next week.

Other sources however indicate that, based on the experience of the previous stress tests, there will be no significant deviations from the amounts initially calculated by the Bank of Greece.