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Victoria Mindova

The National Bank of Greece (NBG), Alpha Bank, Eurobank, Piraeus Bank, Attika Bank, Probank, FBBank Panellini Bank go "hunting" for fresh capital within the recapitalization programme in order to stay in the market in times of crisis. The four largest financial institutions will receive about 90% of the required amount from the Greek Financial Stability Fund. They must raise the remaining 10% alone by increasing the capital increase or by finding new investors. The total amount of the capital they have to obtain from private investors is 3.08 billion euro, which should be found by the end of April. This amount is needed to avoid bankruptcy or nationalization of the institutions.
 
Piraeus Bank will convene a general meeting in Athens on 12 April. Alpha Bank’s general meeting will take place on 16 April, the National Bank of Greece will sit on 29 April and Eurobank’s general meeting will take place a day later.

The National Bank of Greece needs 9.8 billion euro in additional capital, which means that it must obtain alone 970 million euro through capital increase. Financial analysts in the country estimate that the bank will not be able to find new funds from the free market and that it will become public property with as major shareholder the Greek Financial Stability Fund. Eurobank’s chance to deal with the fundraising is greater. It needs 5.8 billion euro. It will issue a bond loan of about one billion euro and it will have to raise another 383 million euro to cross the 10% threshold.
 
Alpha Bank’s requirements do not exceed 4.6 billion euro. According to recent data published in the Greek media, the financial institution will be able to obtain from private shareholders 10% -12% of the capital required. It is also expected that Piraeus Bank will be able to turn the corner with capital increase of 600 million euro from private funds. The total amount that it needs to continue its operations is 7.5 billion euro. The recapitalization of Attica Bank reaches 400 million euro. The management of the bank will try to cover the entire amount by issuing a bond loan.

Probank is seeking 282 million euro and it is expected that it will be able to cover alone 100-120 million euro by increasing the share capital. Furthermore, the management of the bank is seeking strategic investors from abroad to support the financial institution. FBBank will probably increase its share capital in the coming weeks by issuing a bond loan to cover the 168 million euro it needs to stabilize its position. Panellini Bank will increase its share capital too, as it needs to raise 78 million euro.

Table: bankingnews.gr

Meanwhile, the delay in the talks between the Greek government and the lenders is starting to bring tension among economic analysts. On 20 April this year, Greece has to repay bonds worth 5.8 billion euro. Minister of Finance Yiannis Stournaras had left on Thursday for the meeting of Ecofin without reaching an agreement with the international lenders on the cuts in the public administration. In addition, it is unclear what will happen to the heavy tax on property too.

"We have reached an agreement about almost all issues," the Minister of Finance told reporters upon leaving for Dublin. However, he refused to clarify which issues in the Greek programme had been clarified and which had remained problematic. It is an open secret that the Greek rulers cannot meet one of the most important conditions set in the Memorandum of financial aid - the cuts in the public sector. This is the corner stone, hindering the payment of the next tranche under the recovery programme.

Information suggests that the weakest social strata (unemployed, disabled and large families) will be relieved and the inhabited house duty for them will be reduced by 10% -15%. However, the government has not yet confirmed that the reduction will take effect. "There will be no budget hole," say sources from the Ministry of Finance.

At the same time, the data show that revenues in the treasury have been lagging behind again. The gaps in the budget reached 818 million euro in the first months of 2013 and an overall inability of taxpayers to repay their obligations to the tax services has been observed. Meanwhile, the National Statistics Institute has published the unemployment figures for January. It reached 27.2% compared to 22% during the same month a year ago. The most serious is the situation for young people up to the age of 24 – unemployment in this group reached 59.3%. One in three in the age group of 25-34 years is also unemployed and 24% of the people aged up to 44 years remain outside the labour market as well.