Greek bank shares jump as IMF says no need for as­set qual­ity check

The Gulf Today - Business - - 6viewpoint -

ATHENS: The In­ter­na­tional Mone­tary Fund (IMF) on Thurs­day backed away from a de­mand for an as­set qual­ity check on Greece’s banks af­ter a pro­posal by the Euro­pean Cen­tral Bank (ECB) to bring for­ward planned stress tests next year, driv­ing a re­bound in the shares.

The IMF’S pre­vi­ous calls for an as­set qual­ity re­view had sparked fears of another di­lu­tive cap­i­tal in­jec­tion for banks’ share­hold­ers, ham­mer­ing the sec­tor with steep losses of more than 30 per cent since mid-au­gust.

“On the sub­ject of the Greek bank­ing sys­tem, let me em­pha­size that we see no fi­nan­cial sta­bil­ity con­cerns at all in Greece,” Poul Thom­sen, head of the IMF’S Euro­pean De­part­ment, said in a state­ment.

“The is­sue is that we need to be sure that there is a strat­egy to deal with Greece’s ex­cep­tion­ally high level of non-per­form­ing loans over the medium term.”

Thom­sen’s state­ment fol­lowed hints by Greece’s fi­nance min­is­ter on Wed­nes­day that the fund would drop its de­mand for an as­set qual­ity re­view (AQR), echo­ing com­ments by an IMF spokesman in Wash­ing­ton.

Greek banks have been re­cap­i­talised three times since the debt cri­sis ex­ploded in 2010 but are still bur­dened by 100-plus bil­lion euros of soured debt. They have com­mit­ted to tar­gets to re­duce the load to 66 bil­lion euros ($78 bil­lion) by 2019.

“It’s a re­lief rally on the back of what ap­pears to be a clear­ing of a blurry back­drop,” said Eurobank Se­cu­ri­ties an­a­lyst Nick Kosko­le­tos.

Greece’s four big banks - Pi­raeus, Na­tional , Eurobank and Al­pha will be part of pan-euro­pean stress tests next year by the Euro­pean Cen­tral Bank.

The Athens bourse’s bank­ing in­dex was up 10.3 per cent, adding to early trad­ing gains, on what traders said was re­lief that a com­pro­mise was reached on the is­sue.

The ECB has of­fered to bring for­ward its stress test of the Greek banks, fi­nal­is­ing data be­fore Greece ex­its its three-year, 86-bil­lion-euro in­ter­na­tional bailout in Au­gust.

Af­ter two years of wran­gling over debt re­lief, the IMF agreed to sup­port con­di­tional par­tic­i­pa­tion in June as part of a deal that un­locked 8.5 bil­lion euros in loans

The ECB, which su­per­vises top Greek banks, has firmly re­jected the IMF’S push for a fresh as­set qual­ity check.

Thom­sen said the ECB’S pro­posal to bring for­ward its planned pan-euro­pean bank health test and un­der­take tar­geted as­set re­views was con­struc­tive.

Newspapers in English

Newspapers from UAE

© PressReader. All rights reserved.