Eurobank recently lowered the over-collateralisation (OC) of its second covered bond programme to the bare minimum allowed by Greece’s covered bond law. Avid covered bond-watchers (there must be a handful of you out there) will know of course, that specially designed legal frameworks are one of the big perks of the covered bond structure – along with juicy benefits like an overstuffing of assets and the dual recourse nature of the centuries-old debt instruments. Read more
Matina Stevis, a Greek journalist reporting from Athens, submits this guest post for FT Alphaville.
A doubly exciting piece of news sent Blackberries abuzz across Greek beaches today, violating the sacred Saturday lunchtime of the last August weekend. Alpha Bank and EFG Eurobank, the second and third largest Greek lenders, are to merge. And not only that, but they reportedly have a brave new investor in the form of the investment arm of a Qatari fund — possibly Paramount Services Holding Limited, and cue the visualisations of a gallant man with headscarf on a white horse. Read more
Greece’s four largest banks agreed to take up a €50m convertible bond to help recapitalise Proton Bank, a small lender, the central bank announced this weekend, in what is being seen as an attempt to avert a run on the country’s fragile banking system. The deal came ahead of an expected announcement this week that several Athens lenders plan to seek emergency liquidity assistance from the Greek central bank, senior bankers told the FT. Greek banks no longer have sufficient high-quality collateral to seek funding from the European Central Bank after recent sovereign downgrades. But they are eligible for liquidity allocated by the Bank of Greece in agreement with the Frankfurt-based ECB and are expected to seek it this week. All four big lenders – National Bank of Greece, Alpha Bank, EFG Eurobank and Piraeus Bank – face a looming liquidity crunch as about €10bn of government deposits are set to be withdrawn from local banks to pay off debt maturing in the next few weeks.
Stunning disclosures on sovereign exposure and ECB collateral from Alpha Bank, one of Greece’s bigger lenders, on Tuesday. This is rare detail on the real pressure points that are arising from a Greek debt restructuring.
The disclosures are found within Alpha’s first-quarter results — in particular this investor presentation. Read more
European banking stocks are under pressure again on Tuesday morning as investors continue to fret about the eurozone sovereign debt crisis:
The most denied cash call of recent times has finally happened. Late on Tuesday night National Bank of Greece announced a €2.8bn ‘Comprehensive Capital Strengthening Plan:
Successful completion of both components of the Capital Plan is expected to raise approximately Euro 2.8 billion of additional Core Tier 1 capital representing an increase of Core Tier 1 capital ratio of approximately 380 basis points. The net proceeds to be realised from the Finansbank Offering will ultimately depend on a number of factors including prevailing market conditions, offer size and structure. Assuming successful completion of the Capital Plan, our Core Tier 1 capital ratio would have been 13.4% as at 30 June 2010, including the impact from the Euro 450 million Tier 2 capital issuance, which was completed in August, and which constituted the first step towards completion of our Capital Plan.
European bank stocks were up, up and away on Wednesday, after far less liquidity was demanded from the European Central Bank’s latest three-month tender than predicted. It’s a good sign that the system as a whole doesn’t face a funding crisis.
But — some were more up than others. And it’s worth asking why. Read more
Mark your calendars.
A slew of Greek banks will be reporting first-quarter earnings next week. Read more
Ignoring the possibility of Greece defaulting on its debt, or further credit rating downgrades making Greek government bonds ineligible for ECB liquidity operations, and you’re still left with potential problems for the Greek financial system.
A Tuesday note from UBS highlights one problem in particular: how widening spreads on Greek government debt might affect local banks. Read more
. . . on the lips of traders Wednesday morning:
Financials: Read more
Selected Greek financials in the wake of the Fitch downgrade and the S&P warning:
Out of the parade of European banks to recently raise cash to repay their governments, Alpha Bank’s rights issue on Monday was never really likely to garner much attention outside of Greece.
In many ways the €986m call is merely a variation on a theme already carried forward by the likes of Unicredit, Société Générale, Swedbank, and BNP Paribas. Read more
Something of a flurry in the market for HSBC on Wednesday, with the shares up 1 per cent as a rumour did the rounds suggesting HSBC might bid for Alpha Bank of Greece.
Clearly, followers of HSBC would like to see the bank turn its attention once again to more emerging economies — although buying Alpha would cost the British bank upwards of £7bn. Read more