Bank

By European Central Bank Chief Mario Draghi

Ladies and gentlemen,

Constantinos Kypreos, Vice President - Senior Credit Officer at Moody's Investors Service, argued that the Bulgarian banking system is on a slow path to recovery after the crisis experienced with the collapse of Corporate Commercial Bank (KTB) in 2014.

The Greek government on Tuesday issued a ministerial council act on the details of the recapitalization of banks defining an 8.0 % interest on bonds and mentioning the operation of CoCos (convertible bonds) with which Hellenic Financial Stability Fund will cover additional capital needs of Greek banks.

Commercial banks in Bulgaria posted BGN 795 M net profit for the first nine months of 2015, an increase of 32% year-on-year and 7% above the figure for the whole of 2014, the central bank has said.

“The fact that the Greek banks recapitalization needs do not exceed 25 billion euros is positive,” the German Finance ministry spokesman, Juerg Weissgerber, said on Monday clarifying, though, that it is too early to estimate whether the total Greek program could be contained.

Four proposals for non-performing (so-called “red”) loans have been place on the table by banks after the Euroepan Central Bank’s stress tests calculated that these loans amount to 107 billion euros.

The ECB’s recent stress tests showed that Greece’s four banks are in need of 14.4 billion euros to cover their capital needs. Banks now have a deadline until Friday, November 6, to send their plans and start a series of discussions and meetings with foreign investors already participating in their portfolios so as to cover their needs.

The new draft bill on bank recapitalization will be voted by Greek Parliament on Saturday night. The bill envisages that all actions should have been completed ahead of the January 1, 2016, bailout so as to avoid any risk of a bailout in deposits.

Risks for Turkish banks are rising but financial metrics have so far held up well and investment grade ratings are assigned to most of the country's large lenders, said Fitch Ratings in a written statement on Oct. 30. 

Still, the sharp fall in value of the lira increases risks for banks' asset quality, capitalization and foreign currency liquidity positions, it warned. 

“Those who are cooperative borrowers and it is objectively impossible for them to pay off their loans should not be afraid of the auctioning of their primary residence,” the president of Hellenic Bank Association and National Bank governor Louka Katseli  answered to a clarifying question of Athens News Agency on the code of conduct of the Bank of Greece.