HFSF holding in banks sinks to
The state bank rescue fund, the Hellenic Financial Stability Fund (HFSF), revealed a profit of 1.45 bln euros for the first quarter of the year, but the value of it’s shareholdings in Greece’s core lenders has dropped dramatically.
The amount reported in the HFSF Q1 financial statements is attributed to accounting gains (unrealised capital gains) of 1.43 bln euros from bank holdings and warrants.
In particular, the gains from the revaluation of HFSF’s participation in the four systemic banks stood at 2.5 bln euros in Q1, while the negative impact from the increase in the valuation of warrants amounted to 1.08 bln.
The fair value of HFSF shareholdings rose to 25.1 bln euros at the end of March from 22.6 bln at the end of last December. Nevertheless, the current fair value has dropped to 18.5 bln.
The movement reflects the banks’ stock performance on the Athens Stock Exchange, which soared 13.1% in Q1 but has plunged 23.3% since then.
This means that the 2.5 bln euros of accounting gains in Q1 reversed to unrealised capital losses of 6.6 bln since then and will burden the Q2 result accordingly.
HFSF equity increased to 35.87 bln euros from 34.42 bln at the end of 2013 reflecting a reduction of the accumulated deficit by the period profit. As stated in the 2013 annual report, HFSF equity corresponds to the potential recovery value of the original paid up capital of 49.7 bln euros. The difference of current equity to capital is attributed to the cumulative loss of 11.3 bln euros stemming from the resolution of non-core banks and the accounting impact of