Extension of one month (30 days) gave the banks Finance Minister
Extension to 30 September, for the publication of the financial results for the first half of 2015, giving banks the Ministry of Finance.
In particular, in a decision signed by the Minister of Finance, Ev. Tsakalotos extended until September 30 the deadline for the publication of financial figures for the first half of 2015 from the banks.
"The deadline for publication of half-yearly financial reports referred to in paragraph 1 of Article 5 of Law. 3556/2007 for the period 1.1.2015 - 06/30/2015 credit institutions with shares listed on the Athens Stock Exchange extended until 09.30.2015 "highlighted features in its judgmen
article on bloomberg yahoo doesn't make me post it!!!!!!!!!!!!!!
With 10-11 billion capital needs will have to invest from 4.5 to 4.95 billion. Individuals and the FSF from 5.5 to 6 billion.
The disaster seems to prevent the banking system as there are newer evidence that the adverse scenario the capital needs of Greek banks to tests stress will stand at 10-11 billion. And not 12 to 14 billion. Originally estimated.
This development is especially encouraging - though still can not be said to have locked the final level of capital needs -.
Recall that started from a range of 9 billion. as standard and 16 billion. the adverse scenario, then the adverse scenario of the stress tests was revised lower to 12-14 billion. and recently there are signs that the bar capital needs reduced the adverse scenario at 10-11 billion. Euro.
The ceiling of the capital needs decreased - a positive development for the shareholders - mainly because there is an intention to adopt realistic conditions in parametric process commonly even in unfavorable scenario to not adopt extreme assumptions, GDP, unemployment and NPLs.
Eg the initial target for NPLs 50% lowers but does not specify how the bar is reduced.
Based bank sources if ultimately the capital needs of the adverse scenario is 10-11 billion. euros this means that to avoid a dilution of private shareholders should invest 4.5 to 4.95 billion. euros and the FSF from 5.5 to 6 billion. Euro.
A leading banker to question whether they can gather from 4.5 to 4.95 billion. from our private replied "everything will depend on whether there after the elections for a new government that inspires confidence that it will apply the memorandum and formulate a development policy of Greece.
If the new government show firmness and determination and the first evaluation of the third memorandum of October 2015 is positive so then not excluded to appear private shareholders who seriously consider to invest again in Greece.
Surprisingly, despite the stock market disaster positive element is the fact that the prices of capital increases will be carried out at dramatically low prices.
Investors have lost their investment, but because some have and some million billion shares are likely to seize the opportunity and buy back Greek banks.
If the capital requirement is 10-11 billion. This means that banks have 15 billion. funds by subtracting from the 26 billion. existing Chapters 10 -11 billion. the new capital requirements.
These funds have a valuation of 3.5 billion. euros, not 15 billion. funds have value 0,23 P / BV or conditions existing funds of about 0.13.
Dramatically Low capitalization of banks in the stock market is an incentive for new and existing private shareholders.
At the same time it should be remembered that 1.4 billion. Bond will become mandatory in shares changing structure of capital due to the bail in
»So there is a possibility under certain conditions 4, 5 to 4.95 billion. attributable to shareholders of private banks to cover development certainly very encouraging
A key role in the rescue of the banks will play the level of non-performing loans (NPLs)
At 13.2 billion. Estimates the capital needs of Greek banks by Alberto Gallo, chief analyst at Royal Bank of Scotland.
In particular, the British investment bank points out that in the baseline scenario, the needs of banks to capital will amount to 13.2 billion . Euro.
In this scenario, explains the RBS, the initial dose of 10 bn. Euros from the European Stability Mechanism (ESM) will be judged insufficient, paving the way for the participation of bondholders in bail in.
A key role in the rescue of banks will play the level of non-performing loans (NPLs), as the rate of increase will determine the future of bondholders.
It is noted that the capital needs of 13.2 bn. Euros, assumed an increase in NPLs by 20%.
However, the RBS trusts that participation of junior debt holders in the process of recapitalization of Greek banks.
Things are somewhat better for holders of senior debt, where their participation will depend, as mentioned above, the size of the NPLs.
"Rising NPLs are inevitable because of capital controls and the general stagnation of the Greek economy, "says Al. Gallo.
The higher the gain, the greater will be its capital "hole" and therefore, the greater will be the participation of bondholders in rescue banks, concludes the analyst. It is worth noting that the bankingnews, throughout the course last month, consistently held that the capital needs of banks ranging between 12 and 14 billion. Euro. In a similar analysis, Barclays estimates that capital needs will rise from 5.1 billion. euros (baseline scenario) to 14 7 billion. euros (adverse scenario). More specifically, for Piraeus Bank estimated capital 3 bln. euro in the baseline scenario and 6.5 bn. in the negative. As to the Eurobank, the Barclays «sees' capital needs 2.1 billion . Euros in the baseline scenario and 3.4 bn. euro unfavorable. Meanwhile, the British bank considers the capital needs tisEthnikis Bank is zero in the baseline scenario and 3.1 billion. euro unfavorable. Regarding Alpha Bank, the Barclays notes that the capital requirement is zero in the baseline scenario and to 1.7 bn. in unfavorable. It is noted that the basic scenario predicts recession -2.1% in 2015 and -1.1% in 2016 and an increase in unemployment 25.7% and 26.3% respectively.
Senior bonds of Greek banks tumbled after Euro-area finance ministers protected depositors from any losses in the nation’s 86 billion-euro ($96 billion) bailout.
While Greece’s third bailout will spare depositors in any restructuring of the nation’s financial system, senior bank bondholders may not be so lucky, according to comments from Eurogroup President and Dutch Finance Minister Jeroen Dijsselbloem. The bondholders will be in line for losses if Greek lenders tap into any of the financial stability funds set aside in the new bailout.
“Bondholders were overly optimistic because bail-in of senior bonds was not explicitly mentioned before,” said Robert Montague, a senior analyst at ECM Asset Management in London. “Today they were brought back down to earth with a bump.”
Under the bailout terms, as much as 25 billion euros will be made available in a fund to recapitalize the Greek banks, including 10 billion euros as a first installment. Greek stocks rose and government bond yields dropped on the deal, though senior unsecured bank bonds fell.
Eurobank Ergasias SA’s senior unsecured 4.25 percent June 2018 bonds dropped 19 cents to 35 cents on the euro at 1:35 p.m. in London. Piraeus Bank SA’s senior unsecured 5 percent March 2017 bonds plunged 15 cents to 37 cents, while Alpha Bank AE’s senior unsecured 3.375 percent notes due June 2017 dropped 13 cents to 55 cents, according to data compiled by Bloomberg.
“The bail-in instrument will apply for senior bondholders, whereas the bail-in of depositors is explicitly excluded,” Dijsselbloem said at a press conference in Brussels on Friday.
Greece’s euro-area creditors made adoption of the European Union’s Bank Resolution and Recovery Directive, or BRRD, a precondition of the bailout. The directive, which makes it easier to impose losses on senior creditors, should rank senior unsecured bondholders and depositors equally, said Olly Burrows, London-based financials analyst at brokerage firm CRT Capital.
By protecting deposits, Greece is walking a different path to neighboring Cyprus, which imposed a levy on uninsured depositors as part of a rescue package in 2013.
“It is not clear how they will make it possible to bail-in bonds while excluding deposits, but as we have seen in other problematic situations, where there is a will there will be a way,” Burrows said. “We call Dijsselbloem’s solution a bail-up: part bail-out, part bail-in and part #$%$-up.”
Greece will probably be the proving ground for the European Union’s new rules on resolving failing banks, according to analysts at Barclays Plc.
Greece’s euro-area creditors in July made transposition of the EU’s Bank Recovery and Resolution Directive into national law a precondition for fresh bailout talks. The BRRD gives regulators wide-ranging powers to recapitalize stricken lenders with the aim of maintaining the financial services an economy needs and without recourse to public funds.
“This would be the first chance for creditors to see the new European bank legislation ‘in action’ and it may make for uncomfortable viewing,” analysts led by Christy Hajiloizou wrote in a note published late Thursday. “Specifically, we expect non-preferred creditors to suffer losses as far up the liability stack as senior unsecured bondholders in a resolution.”
The European Central Bank’s supervisory arm will probably attempt to ensure private stakeholders and creditors make as large a contribution as possible to the recapitalization of the lenders, the analysts wrote. The ECB wants to create a precedent for future bank resolutions, meaning the process will “likely have broader implications for European bank credit.”
Senior bonds of the four largest Greek banks are quoted at between 53 cents on the euro for Eurobank Ergasias SA’s 295 million euros ($328 million) of 4.25 percent notes due in June 2018, and about 68 cents for Alpha Bank AE’s 3.375 percent debt maturing in June 2017, data compiled by Bloomberg show. The prices are too high, according to Barclays.
‘Close to Zero’
“We estimate recovery would be close to zero in a bankruptcy given their heavily encumbered balance sheets,” the analysts wrote.
The BRRD’s most widely watched attribute is the ability it gives regulators to convert senior bonds to equity or write down their value. In Greece that tool doesn’t become available until Jan. 1. Barclays expects the resolution of the Greek banks to be addressed before then using different methods.
“This does not preclude the use of other resolution tools, such as transfer of senior bonds to a ‘bad bank,’” the analysts wrote. “We would still expect final recovery to be significantly below current cash prices.”
For bondholders, the best solution would be no resolution, with private capital raisings, or recapitalization under state-aid rules, according to Barclays. While that can’t be ruled out, “it would be would be counter to the political, economic and regulatory incentives of the ECB and euro area.”
Critical considered the first ten days of September for banks, as it expected the results of the quality of their assets (AQRs)
Controlling AQRs has already started the previous week, while according to Capital.gr, prolonging the banks until August 17 in order to deliver all the equipment to check their loan portfolios.
Almost parallel with the evaluation of loan portfolios, will "run" the exercise of the stress tests, which will begin around the 25th. Final point is the results for the amount of new capital requirements for banks to have been exported by the end of October and then immediately start the share capital increases.
As apologies yesterday by Reuters, European officials in the anonymity regime, banks expect to receive the first tranche of liquidity, EUR 10 billion. euros from the ESM, even before the completion of stress tests, after the signing of the new program rescue, if this exist and the agreement of the Bank of Greece. As confirmed by the same sources in the foreign agency, the banks had diaminythei that these funds "have already put aside and is ready for disposal by the ESM».
As regards the evaluation of loan portfolios, which is considered the most difficult phase of the whole process of stress tests, checks terms Supervisor concerning the examination of more than 4,000 files on corporate loans and about 2,000 files mortgage four systemic banks and will be thoroughly two years.
Finally it should be noted that NBG's deferred tax assets as of March 31, 2015 stood at #$%$3,855million of which #$%$1,855 millionrelates to the 2012 Private Sector Involvement (PSI) losses, #$%$1,385 million relates to credit losses and #$%$582millionrelates to tax losses. The recoverability of the deferred tax assets is reviewed periodically as part of the preparation of the annual and interim financial statements, considering all available positive and negative evidence, including future reversals of existing taxable temporary differences, recent financial results and the estimated future taxable profits. As always, the first half 2015 financial statementswill be reviewed by NBG'sindependent statutory auditors.
On June 30, 2015 NBG's Eurosystem exposure stood at #$%$27.6 billion of which #$%$17.6billion was through ELA, an increase of #$%$2.0 billion compared to May 19, 2015 as it was announced in the presentation of the first quarter 2015 results, while in July there was no material change. The cash value of unencumbered ELA eligible collateral exceeds #$%$6.0 billion in current valuations, while deposit outflows are already showing signs of de-escalationFurthermore, anyimpact from the recent developments in the Greek economy and the banking system on NBG's capital adequacy and non-performing loans is not possible to be estimated presently. It should be noted that the preparation for the Comprehensive Assesment that will be conducted by the Single Supervisory Mechanism (SSM) within the context of the «Euro Summit Statement of July 12, 2015» is already underway and the Comprehensive Assessment is expected to conclude by the end of 2015, including a possible recapitalization in case of a capital shortfall.
Athens may seek #$%$24B in a first tranche of bailout aid from international lenders in August to prop up its banks and repay its debts, Greece's Avgi newspaper reports.The funds would be used to channel #$%$10B as an initial recapitalization to domestic banks, #$%$7.16B to repay an emergency bridge loan, #$%$3.2B toward Greek bonds held by the ECB and other payments.Athens also plans to open its stock exchange tomorrow, after five weeks of closure.Greek banks: OTC:ALBKY, OTC:BPIRY, OTC:EGFEY, NBGETFs: GREK
The situation in the Greek banking system examined in the meeting were the Finance Ministry Mr. Euclid Tsakalotos and Yiannis Stournaras.
The meeting examined the timing of the recapitalization, an issue which is central to the negotiations with the institutions. According to information from Reuters, which cites official Bank of Greece, the aim is to complete the recapitalization by the end of 2015 and to prevent bail in.
Reportedly even the first resistance exercises (AQR) have already started to become banks, in order to be completed by October all stress tests.
Executives of the Bank of Greece elgan however, that "the primary goal of all this is the recapitalization of Greek banks to be completed in 2015 and made by the Financial Stability Fund (as in 2012) rather than through loans apton European Stability Mechanism - ESM.
This is because, as explained:
- If the recapitalization done through the FSF, the cost assumed by the public and not banks and thus exclude the "haircut". If done through ESM, maybe not.
- If the recapitalization took place from 2016 onwards, it would apply the new European directive providing haircut depositors and bondholders.
National Bank of Greece (NYSE:NBG) is one of 39 dealer banks the European Stability Mechanism uses to distribute its paper. It's very rare for a dealer to decline an offer to participate in the syndicate, so NBG's decision can be read as a sign of Greece's financial isolation, writes John Geddie at Reuters.According to two dealer banks, NBG was asked in an online chat forum to take part in the sale, but said "no," citing capital controls.Greek banks did reopen on Monday after a three-week closure, but capital controls do remain in place, and the stock market in Athens remains closed.