BANKS

Since the beginning of the year, the general index has fallen by 35 percent while the bank index has given up 65 percent. The situation with European and American banks is similar. Losses booked by domestic banks are almost double as the pan-European index of banks has declined by 35 percent while US bank shares have fallen by 28 percent.

Bank officials estimate, and hope, that the rebound will be V-shaped, and that the sharp decline in GDP in the second quarter will be followed by a strong recovery as of the fourth quarter of 2020, restoring economies and markets to normal.

Bank officials say that the European Commission appears willing to discuss this issue constructively. Alpha Bank chief executive Vasilis Psaltis told analysts at a conference call on Friday while presenting 2019 earnings, that the DTC issue is important and being constantly monitored.

The European Central Bank has fully shielded the banking system in terms of liquidity, bad loans, and capital adequacy, while the European Commission has suspended several regulations to prevent any additional state aid measures from having an impact on shareholders, bondholders, and depositors. Greek bank shares, despite yesterday's gains of 17.84 percent, may have plummeted 60 percent since the beginning of the year, but the current crisis for Greek lenders is very different from what we have experienced in recent years.

Bank of Greece governor, Yannis Stournaras, met with the heads of the country's lenders on Monday and briefed them on the positive outcome of talks on the issue. This is seen a being a major development for the sector as it opens the path for the sale of large-sized securitizations of bad loans within the framework of the Hercules plan that will offer state guarantees on senior tranches, once conditions in the market return to normal.

Despite expectations from government officials that the issue will be soon settled, the SSM has yet to reply to a request from Greek authorities calling for the bonds from the securitized asset to carry a zero risk factor. The ECB understands the position that Greek banks are in but there are mixed views on this in Frankfurt, with some insisting that rules be strictly applied to all.

Out of the 120,000 loan holders who can potentially seek more favorable repayment terms (on housing, consumer and business loans tied to their primary residence), about half have applied to restructure the debt. However, only 4,000 of them have put together a complete application on this, of which half, some 1,600 applications, have been rejected for exceeding allowable income and asset levels.

The new scheme is expected to back 560 million euros of new investment by farmers, agribusiness, food and bioeconomy companies across the country. Agriculture and agribusiness is crucial sector for the Greek economy and key employer in rural districts and regional towns.

“Our inaugural Tier II capital transaction is a key milestone in the implementation of our recently communicated strategic plan. The strong demand by a well-diversified international investor base led to this successful outcome, which represents a strong testament to the future of Alpha Bank and the prospects of the Greek economy,” said Alpha Bank chief executive Vassilios Psaltis.

In a bid to reach these targets, the bank will move ahead with the 5 billion euro Vega securitization project and the 2 billion euro Phoenix project. This means that the target to slash NPLs in 2020 is being increased to 11 billion euros, up from 6.4 billion euros previously.