BANKS

Developments seem to be accelerating after a group of shareholders announced their proposal for a share capital hike at the bank, accompanied by a series of terms and conditions that make its implementation difficult.

Of the 600 million euros recovered by PQH, around 226 million euros was the result of settlements and loan restructurings, while about 54 million euros was recovered from the liquidation of real estate.

In one-on-one meetings with each bank, the BoG staff presented the plan in detail, without, however, delving into all technical details that will have to be discussed and decided by the government.

The goal of the management is for the agreement to be signed within 2020 in order to be reflected in the annual accounting statements.

The draft law was submitted to parliament late last night. It will then be discussed in the relevant parliamentary committees and then put to a vote in plenary at the end of the week.

The banks' views are expected to be supported by a special study, which will show the potential impact and the risk of creating new wave of bad debt from the new bankruptcy code.

The banking sector, due to concerns about the long-term effects of the crisis on the quality of their portfolios, has come under stronger pressure in Europe and the US. In Europe, the banking index has fallen since the beginning of the year by about 27% against a fall of 12% of the pan-European Euroxx 600 index, while in the US the banking sector has fallen by 20% versus a rise of 5.2% in the S&P 500. 

The crisis caused by the pandemic creates a window of opportunity for the creation of this tool that should not be lost, according to central bank sources. Stournaras has stressed that the bad bank will support the planning of banks and be available on a voluntary basis.

NBG seems to be failing in its role as a mediator, to transform deposits into loans. At a critical juncture for the country, it is unable to meet its historic role as a bank with a special role in the banking system and financing the economy. The bank is lending, but less than what it is being repaid, at a time when restarting the economy requires accelerating credit growth.

In fact, the total liquidity to be pumped into the economy in the first half of this year will exceed 10 billion euros, including repayments of older loans.