Greece’s central bank said it’s postponing plans to conduct separate stress tests on the country’s lenders, part of terms for a 110 billion euro ($144 billion) bailout by the European Union.
The decision to delay the tests was made on the recommendation of the EU, the International Monetary Fund and the European Central Bank because it wouldn’t contain any information that differs from the EU tests performed in July, the Athens-based central bank said today in a statement. It didn’t specify when the tests would be held.
“The EU-wide stress test confirmed our assessment of the solvency condition of Greek banks,” the central bank said. “On the basis of current developments, the new exercise is very likely to confirm this assessment.”
Agricultural Bank of Greece SA, known as Atebank, was the only one of six Greek lenders to fail the July 23 EU stress tests, reporting a Tier 1 capital ratio of 4.36 percent, less than the 6 percent threshold. Atebank has said it plans to replenish capital through a rights offering. The other five Greek banks, including National Bank of Greece SA, the largest, all passed the test, as did two Cypriot lenders with a presence in the country.
National Bank this month announced plans to raise 2.8 billion euros by selling convertible bonds and new shares to stockholders, as well as through a sale of its Turkish unit, to further boost capital.
The stress tests for Greece’s banks have been postponed by a month until the end of October as the country seeks to raise funds from capital markets, the Financial Times reported earlier today, without saying where it got the information.
Greek banking shares fell today, with Alpha Bank SA, the third largest, dropping 3.7 percent, the worst performer of the 54 financial institutions on the Bloomberg European Banks Index. EFG Eurobank Ergasias SA declined 3.3 percent, while National slid 2 percent.
Separate testing of the country’s banks is part of the terms of a 10 billion-euro stability fund set up under the EU- led package of rescue loans.
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