Why Greek lenders could lose €15.5B
frankfurt/athens — Greece’s four biggest banks said on Saturday that no new funding plans were needed after stress test results showed they would lose around €15.5 billion of their capital by 2020 under an adverse economic scenario.
The health check by the European Central Bank, aimed at uncovering any capital shortage before Athens exits its €86 billion ($106 billion) bailout in August, was carried out separately from a stress test of other eurozone banks.
Test results for 33 lenders from other eurozone countries will be published in early November.
The ECB’s stress test of Greece’s four largest banks — Piraeus, NBG, Eurobank and Alpha — was done early to allow time for any possible capital shortfall to be filled before Athens leaves its bailout.
Among the banks, Alpha Bank performed best as its Common Equity Tier 1 ratio would drop by 8.56 percentage points to 9.69 per cent according the adverse scenario of the test. It would drop by 8.68 percentage points to 6.75 per cent for Eurobank, 9.56 percentage points to 6.92 per cent for National Bank of Greece and 8.95 percentage points to 5.90 per cent for Piraeus Bank.
According to the ECB, the 2018 health check was not a pass or fail exercise as no predetermined capital threshold was set that would trigger a need to recapitalise.
“Any recapitalisation decision will be taken on a case-bycase basis, after assessing each bank’s situation in the light of the results of the stress test and any other relevant supervisory information, following a holistic approach,” the ECB said.
After the release of the stress test results, Alpha Bank, National Bank and Eurobank said in separate statements that the input from Single Supervisory Mechanism supervisors was that they had no capital shortfall and hence no capital plan was deemed necessary. —