ATHENS: Greece’s banks will need an estimated ¤10 to ¤14 bn of fresh capital to keep them afloat and more time before they reopen even if a deal is reached with European creditors tomorrow, a senior Greek banker said yesterday.
Shut for two weeks, banks have relied on an ECB-approved emergency credit line from the domestic central bank to dispense rationed cash and are due to reopen on Tuesday, barring another extension of the bank holiday.
Despite their having bled more than ¤34bn of deposits since December and Greece’s worsening economic outlook, banks are optimistic that branches can be reopened by the end of next week, the banker said.
“Liquidity is assured at the daily 60 euro withdrawal limit until Monday night,” the banker said, declining to be identified. “There is a cushion of about 750 million euros until then.”
National Bank, Piraeus, Eurobank and Alpha, which account for about 95 percent of the industry, will likely need to be recapitalised after an assessment by regulators and are not likely to return to a semblance of normalcy for months.
“There is an estimated need of about ¤10 to ¤14bn in new capital,” the banker said. “Given the magnitude of the shock we have been through, regulators will take stock of the situation and the impact on non-performing loans. A stress test by September would allow time for things to normalise.”
Athens would seek to raise the money from private investors, but if it proves futile, banks may get a capital injection from the European Support Mechanism’s Direct Recapitalisation Instrument (DRI), a new facility which has so far been unused.
Reuters
