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Greek banks' capital gap may hit upper end of 10-25b euro range: paper
[ATHENS] Greek banks' capital shortfall may reach the upper end of a 10-25 billion euro (S$16-40 billion) range set out in the country's third bailout, financial daily Kathimerini said on Wednesday.s
The European Central Bank (ECB) has been assessing the capital needs of Greece's top four banks - National Bank , Piraeus, Eurobank and Alpha .
Official results are not expected until the end of October. But the paper said checks on business loans had come in worse than expected and banks were expecting a similarly bleak picture when it came to retail consumer loans.
Kathimerini said the ECB was using collateral values on mortgage loans that were 30 per cent lower than those suggested by the banks. "It is estimated that from the assessment of loan portfolios there is a capital shortfall that exceeds 10 billion euros, on which the needs that will emerge from the stress test will be added," the paper said.
"On this basis, analysts estimate the final capital need may approach 20 billion euros." Banking insiders have estimated that the ECB's health check could identify a capital shortfall of up to 15 billion euros.
Bankers have said that the sector's recapitalisation should not alienate investors by diluting existing shareholdings too heavily, as this could endanger efforts to regain the investor confidence needed for economic recovery.