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Greek banks expected to pass ECB's stress test: National Bank chief
GREEK banks will pass the European Central Bank's (ECB) stress test of their financial health, the chief executive of the country's second-biggest lender, National Bank (NBG), said on Monday.
The ECB will publish the results of a stress test of Greece's four largest lenders - Piraeus, NBG, Eurobank and Alpha - in May to allow time for any capital shortfall to be filled before Greece leaves its bailout programme in August.
"All Greek banks will pass the stress tests. The results will be encouraging," Leonidas Fragiadakis told reporters on the sidelines of a signing ceremony with the European Investment Fund on loan facilities for small businesses.
The Greek stress test, aimed at uncovering any capital shortage before Athens exits its 86 billion-euro (S$140 billion) bailout, will be carried out separately from a regular stress test of other euro zone banks.
Test results for 33 lenders from other euro zone countries will be published on Nov 2. Greek banks have been recapitalised three times since a debt crisis exploded in 2010, but are still burdened by 96 billion euros of soured debt.
They have committed to targets to reduce that to 65 billion euros by 2019.
"The Greek banking system will emerge more than OK," Mr Fragiadakis said. The CEO also said NBG was looking to approach two Chinese investors over the sale of a majority stake in its insurance unit National Insurance, after a plan to sell it to Netherlands-based EXIN fell through.
"We are discussing the details of the procedure to approach the two Chinese investors so that the sale takes place as soon as possible and with a positive impact on National Bank," Mr Fragiadakis said.
Last month, NBG terminated a deal to sell a 75 per cent stake in its insurance subsidiary to EXIN Financial Services Holding.
EXIN Partners and US Calamos Investments had agreed to buy the stake for 718 million euros, but the deal turned sour after a legal row erupted between the two buyers. REUTERS