Greek banks fight against time in order to remain private
Fighting against time is on the menu for all Greek banking houses since they are trying to cover all their loses with the haircut of 50% of all greek bonds that was decided yesterday in Brussels.
The damages that will need covering are roughly around 18 billion euros (but it is estimated that the Bank of Greece will ask for more 6 to 10 billion euros as a result of the controls from BlackRock).
From the new sum of 18 billion euros 6,1 billion euros will be deducted from the initial PSI (the agreement of the 21st of July) since there are damages of the first haircut of 21%. So the new deal creates further damages that could go up to 12 billion euros.
All these sums will have to be available by June 2012 and the next steps are the following:
-banks will go forward with sales of property and other assets or to increase in share holding-or both.
-if banks don’t manage to gather the necessary sums then they will ask money from the State (which will have 30 billion euros extra according to the decisions of the EU)
The governement will have to publish common shares to fortify banks will cash. Greece is the only country that has voted this specific law. Unless the EU decides that all banks that defer to the government for capital strengthening will have to give out privileged shares.
There is already a pressure from French and German banks for this legislation to be passed on to all European banks. So Greece will also have priliveged shares published.
-As proved the haircut of the first PSI was in reality 15% or 14% for some banks. So the needs for extra capital will be different from one bank to the other.
Analytically:
-National Bank will need 3,5 billion euros. There is an estimation that with a sale of Turkish Finansbank the sum could be covered but the National Bank will loose its only source of income.
-The recently merged AlphaEurobank will need 2,7 billion euros. First goal of the new bank will be for the merger to fully develop and then the stock holders (Latsis and Kostopoulos families as well as the Quatar fund) will make announcements.
-Piraeus bank will need 1,9 billion euros. According to information the group will go forward with sales of property while bigger shareholders might increase their position through cash availability. There is a chance of a sale of a sister company in Egypt that could bring profits of about 250 million euros.
-ATE bank will need 1,8 billion and the Post Bank 1,5 billion.
From Cypriot Banks the Bank of Cyprus will need 500 million euros and Marfin 600 million euros
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