China Business Blog - Aggregated China Business Blogs
Aggregated China Business Blogs
Greece to sell small banks by mid-July
Aggregated Source: Shanghai Daily: Business

GREECE'S bank rescue fund will aim to sell Hellenic Postbank and Proton by mid-July with big banks continuing to absorb small lenders as part of plans to revive the battered sector, the country's foreign lenders said in an inspection review.

Greece is recapitalizing its four big banks and winding down others deemed non-viable to improve the sector's capacity to fund the economy out of a deep six-year slump. Banks suffered heavy losses from debt writedowns and bad loans.

Small lenders Hellenic Postbank and Proton were split into "good" and "bad" parts and are now fully owned by the Hellenic Financial Stability Fund, a state capital backstop funded with 50 billion euros (US$64 billion) from the country's bailout package.

The European Union and the International Monetary Fund's review said the 50 billion euros are enough to cover recapitalization and resolution costs and would leave enough funds for follow-up stress testing for the sector to be completed by end-2013.

The new tests will assess the adequacy of solvency buffers and loan-loss provisions as banks still face rising credit impairments due to the recession. Bad loans rose to 24.2 percent of their books last year from 16.5 percent in 2011.

The recapitalization of Greece's four core banks - National, Alpha, Piraeus and Eurobank - may be wrapped up by June 14. They need 27.5 billion euros to plug capital holes and must raise 10 percent from private investors via share offerings.

Original URL: Click here to visit original article
Copyright Shanghai Daily: Business