Home Greek news economy Greek Lenders To Get Temporary Capital Boost Ahead of Final Recap

Greek Lenders To Get Temporary Capital Boost Ahead of Final Recap

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Greek lenders will get a temporary capital boost from the state in the form of bonds until the country finalizes a bank recapitalization plan that has been pushed back until after the May 6 elections, a local newspaper reported Friday.

Citing unnamed sources, newspaper Kathimerini reported that lenders will receive bonds from a special bank bailout fund as a means of boosting capital and enabling them to keep borrowing from the European Central Bank and local central bank after booking massive losses due to Greece’s debt restructuring plan.

“This way the gap that has been created by the pushing back of the final bank recapitalization terms will be handled,” the newspaper said.

Last week, Greece’s bank bailout fund received EUR25 billion worth of European Financial Stability Facility bonds that will be used to help plug the holes in the balance sheets of Greek banks.

The country’s top four lenders–National Bank of Greece SA (NBG), EFG Eurobank Ergasias SA (EUROB.AT), Alpha Bank AS (ALPHA.AT) and Piraeus Bank SA (TPEIR.AT)–have posted fourth quarter losses of more than EUR24 billion as a result of Greece’s bond swap plan, forcing them to seek state aid to recapitalize. They have already received commitments totaling EUR18 billion from Greece’s special bank bailout fund, the Hellenic Financial Stability Fund.

(source: Kathimerini, Dow Jones)

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