Goldman Sachs analysts held talks last Friday with executives of Greece’s four systemic banks, during a relevant conference, as the Bank of Greece’s (BoG) recently unveiled plan to reduce “bad debt” burdening the domestic banking sector dominated discussions.
Greek banking executives also reportedly referred to prospects for recovery of bank shares at the Athens Stock Exchange (ASE), as the index at the latter has gone “south” over the last quarter.
Representatives of all four banks said the BoG’s three-year plan is still in the “preliminary stage”, while also citing concerns by the SSM over the size of a proposed special purpose vehicle that is at the heart of the proposal, namely, 40 billion euros. Greek bankers also expressed concern over the possibility of deferred tax credits (DTCs) being considered as state aid.
Individually, representatives of Eurobank pointed to a recent agreement whereby the lender absorbs its property development subsidiary, Grivalia, a deal expected to conclude in April 2019. Eurobank is expected to submit updated figures on NPLs in the first quarter of 2019.
Alpha Bank representatives indirectly asserted that the biggest obstacles in selling-off “bad debt” portfolios stem from dilution deferred tax credits. Bank officials also revealed that mortgage loans valued at three billion euros are now affected by a primary residence protection law.
National Bank officials alluded to a more gradual rate of reduction of NPLs, compared to Eurobank, while forecasting return on equity (ROE) of 2 percent in 2019-20.
Finally, Piraeus Bank representatives said the SSM has still not responded to a NPL-reduction plan submitted last September.
Additionally, the bank is planning to issue a Tier 2 in 2019.
