ECB’s bank re­struc­tur­ing plan check to be a mere for­mal­ity

Kathimerini English - - Focus - BY YIAN­NIS PAPADOYIANNIS

Na­tional Bank, Pi­raeus and Eurobank have sub­mit­ted their re­struc­tur­ing plans to the Euro­pean Cen­tral Bank for ap­proval, but their ex­am­i­na­tion by Frankfurt will be mostly aca­demic.

As the ECB had stressed dur­ing the pre­sen­ta­tion of its stress test re­sults at the end of Oc­to­ber, the cal­cu­la­tions for the fi­nal cap­i­tal re­quire­ments would take into ac­count the Euro­pean Com­mis­sion­ap­proved re­struc­tur­ing plans. And thanks to them, Greek lenders are show­ing no cap­i­tal deficits. The ECB will ex­am­ine th­ese plans and have them ap­proved by De­cem­ber 12.

In the case of Pi­raeus Bank the process is purely aca­demic as the 660-mil­lion-euro cap­i­tal short­fall that the static model pointed to has been cov­ered by the lender’s share cap­i­tal in­crease com­pleted last spring. That means the Pi­raeus Group does not need to take any fur­ther ac­tion. Mean­while Al­pha Bank, Greece’s fourth sys­temic lender, was the only one to pass the stress test with­out any re­quire­ments what­so­ever based on its 2013 fi­nan­cial fig­ures.

In con­trast, Na­tional and Eurobank will have to im­ple­ment the ac­tion plans they have agreed with the Com­mis­sion to cover the cap­i­tal deficits that the static ap­proach re­vealed. Even after fac­tor­ing in the share cap­i­tal in­creases of last spring, amount­ing to 2.5 bil­lion euros and 2.86 bil­lion euros re­spec­tively, the two lenders showed a cap­i­tal short­fall: Na­tional has to cover 933 mil­lion euros and Eurobank 1.76 bil­lion.

The cap­i­tal re­quire­ments of Na­tional and Eurobank are re­versed with the dy­namic model, which fac­tors in the ac­tions (such as as­set sales, nine-month prof­its etc) that took place after end-2013 and will also be com­pleted in the com­ing months. When the lat­ter are added to the equa­tion, Na­tional not only sees its short­fall van­ish, but it also shows into a cap­i­tal sur­plus of 2.02 bil­lion euros, the big­gest of all four banks. Like­wise, Eurobank’s cap­i­tal deficit shrinks to a neg­li­gi­ble 18 mil­lion euros.

All four core banks have told the Euro­pean Com­mis­sion’s Direc­torate Gen­eral for Com­pe­ti­tion that they will im­ple­ment the re­struc­tur­ing plans which pro­vide for a sig­nif­i­cant re­duc­tion in their an­nual costs and have a bind­ing character. Na­tional of­fi­cials note that the ninemonth prof­its of 1.17 bil­lion euros have al­ready cov­ered the re­quire­ments.

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