Galery

1

In an article for the online edition DEAL journalist Kostas Nousis published a secret report on the Greek banks prepared by BlackRock. The study was commissioned by the Bank of Greece in August 2011 and mandated by the European Commission, the European Central Bank and the International Monetary Fund as a condition for the granting of a financial aid amounting to 109 billion euro provided for in the memorandum of 21 July 2011.

The Solar Project, as is the codename of this study, was worth 19 million euro. However, not only has it been kept secret but it has not been presented even to the bankers themselves. The only certain thing is that it is in the office of the Governor of the Bank of Greece, George Provopoulous, and of the Minister of Finance, Yiannis Stournaras.

All requests for the publication of the report had been rejected, including those expressed from the rostrum of parliament. The study was the basis for the change of the bank map of Greece, following the complete "inventory" of "bad" bank loans, even though the details of the study had not justified the need for contraction of the banking system.

This 105-page study is of great importance for the banking, business and political system of Greece, as it has come to light shortly before the delivery of the new report (on 30 November) commissioned again to the U.S. company.

One of the most important points in the report is the finding that 90% of housing loans granted by banks from Group A "have not been granted in accordance with the usual practice that must be followed to avoid potential risks."

• As regards loans to SMEs, 47% of them were at risk whereas the risk exposure regarding professional loans reached 51%.

• According to BlackRock, the tax assessment of the property at that time was 33% higher than the market price. The company determines the auctioning of houses as the only solution and suggests that at least 39% of housing loans should be forgiven, which has never been made ​​public until now.

Dividing the Greek banks into two groups

For the purposes of this report the American company has divided the Greek banks into two categories.

Group A includes seven banks, namely the National Bank of Greece, Eurobank, Alpha Bank, Piraeus Bank, Emporiki Bank, Agricultural Bank and Post Bank.

Group B includes eleven banks, namely Millennium Bank, Geniki Bank, Attica Bank, Probank, Proton Bank, T-Bank, FBB, Credicom Consumer Finance, Panellinia Bank, the Investment Bank of Greece and Aegean Baltic Bank.

Risk Analysis

According to the report by BlackRock Solution entitled "Diagnostic Assessment of Greek Banks" - 30 December 2011, the total amount of the loans granted by the 18 banks until 2011 and checked by the company was 255 billion euro.

Group A

The volume of the portfolio of Group A amounted to 231 billion euro but the check covered just 200 billion euro of them, including housing loans to the amount of 65 billion euro, consumer loans to the amount of 26 billion euro and commercial loans to the amount of 109 billion euro as well as a total of 2,981 credit records.

Group B

The check covered risk housing and consumer loans totalling over 500 million euro and risk loan portfolios totalling 500 million euro. Two banks in the group were analysed in relation to a specific issue.

• The liquidation of T-Bank had been announced on 17 December 2011, so all analyses referred to the period prior to June 30.

• Proton Bank had been divided into a "good" and a "bad" part on 10 October, so the analyses of loans also referred to 30 June.

BlackRock analysed loans granted by the 11 banks in Group B totalling 23.7 billion euro, 15.8 billion euro of which were business loans and the remaining 7.9 billion euro housing and consumer loans.

The approach used in connection with the consumer loans granted by 5 banks in Group B, namely Millennium Bank, Credicom, Geniki Bank, Attica Bank, T-Bank, was basically the same as that used for the banks in Group A.

Credit Cards

Positive assessment

Credit card loans granted by the banks in Group A amounted to 6.3 billion euro for a total number of 5 million loans. A sample of 80 loans, granted by the National Bank of Greece, Eurobank, Alpha Bank, Piraeus Bank, Agricultural Bank, had been taken for each bank in Group A, which had in its portfolio credit card loans exceeding the amount of 500 million euro. In general, it seems that the banks followed the instructions for compliance since the assessment of 84% of the loans granted by 5 of the largest banks for compliance with the loan granting policy is positive (A, B).

Results of the banks in Group B: the same criteria as for the banks in Group A had been requested for 5 of the 11 banks, namely Millennium Bank, Credicom, Geniki Bank, Attica Bank, T-Bank, as their exposures alone exceeded the amount of 500 million euro. For another 5 banks, including FBB, Panellinia Bank, Proton Bank, the Investment Bank of Greece, the company had requested general data to establish their exposure to housing loans, credit card loans, loans for the purchase of cars and other consumer loans.

Cars: the total number of loans for vehicle purchase was nearly 280,000, amounting to a total of 1.7 billion euro. The majority of the loans for the purchase of cars were regularly paid in comparison with other consumer loans.

Assessment of consumer loans

In Group A, the number of other consumer loans was 2.5 million, amounting to 18 billion euro.