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Greek banks passed ECB’s stress tests

26 October 2014 / 18:10:18  GRReporter
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Alpha Bank, Eurobank, Piraeus Bank and the National Bank of Greece passed the stress tests (or ‘comprehensive assessment’) of the European Central Bank.

At the same time, 25 out of 130 good Eurozone banks that took the test, could not pass it, according to the ECB's statement. The overall capital shortfall of the 25 amounts to €25 billion.

The banks’ asset values need to be adjusted by €48 billion, €37 billion of which did not generate capital shortfall, the ECB pointed out.

Twelve of the 25 banks have already covered their capital shortfall by increasing their capital by €15 billion in 2014.

The stress test results were officially announced at 13:00 today.

According to Dow Jones, the National Bank of Greece’s capital shortfall was 930 million euros, while Eurobank’s was 1.76 billion. Within the next two weeks, the two banks are required to submit plans to strengthen capital and analyze the strategy to cover their capital shortfalls. As explained by the ECB, the packages of restructuring plans, their latest financial results and other actions taken by the banks’ management, deal with capital requirements to ECB’s satisfaction. "After calculating the dynamic elements of the two banks’ balances, in practice they have no capital shortfall," emphasizes the ECB’s statement.

The results of Greek banks

According to ECB data, the measure of a bank’s financial strength, Common Equity Tier 1 (CET 1), was 8.1 for Alpha Bank. This score put the bank among the top 20% of European banks involved in the stress tests.

The National Bank of Greece had 3.432 billion euros capital shortfall at the end of 2013. NBG has meanwhile raised € 2.5 billion, with the 2014 shortfall limited to € 273.28 million if the submitted restructuring plan is taken into account. This shortfall will reportedly be covered by the distribution of Finansbank shares.

By late 2013, Eurobank had a shortfall of €4.628 billion, but succeeded in raising €2.86 billion. Its restructuring plan leaves only €70.6 billion as shortfall.

Piraeus Bank’s shortfall amounted to € 659.99 million by the end of 2013, as the ECB’s stress tests have shown. According to Reuters, the bank's restructuring plan completely covers this amount.

Three Cypriot banks have failed the ECB’s stress test.

Tags: stress tests Piraeus Bank National Bank of Greece Eurobank Alpha bank
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