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EBRD to become stakeholder in Greece’s four systemic banks

By Axel  Reiserer

EBRD to become stakeholder in Greece’s four systemic banks

As part of the effort to strengthen the Greek banking sector the European Bank for Reconstruction and Development (EBRD) is finalising a total investment of €250 million in the country’s four systemic banks.

Under a financial package that supports the recapitalisation of the four banks, the EBRD intends to invest €65 million in Alpha Bank, €65 million in Eurobank, €50 million in National Bank of Greece and €70 million in Piraeus Bank. As a shareholder the EBRD will play an active role with a special view on corporate governance.

It is the EBRD’s first transaction in Greece since the country became a temporary country of operations in May 2015.

Nick Tesseyman, EBRD Managing Director, Financial Institutions, said: “The recapitalisation of the Greek banks is an essential step towards the recovery of the country’s economy. It complements a Memorandum of Understanding between the Greek authorities and the European Commission and will support economic restructuring in the country. With our involvement we are demonstrating our commitment to contributing to this process and we will play an active role as a shareholder so that the four banks can provide the real economy with finance again.”

The goal of the recapitalisation process is to strengthen the capital base of the four systemic banks and to facilitate their transfer into private ownership. The process is critical for the stabilisation and restructuring of the Greek banking sector and aims to restore depositor and investor confidence, re-establish credit flows and re-open access to finance for the real economy.

An Asset Quality Review and Stress Test undertaken by the European Central Bank identified a capital shortfall of €14.4 billion under an adverse scenario for the four banks. The EBRD’s participation in the capital increase is contributing to the banks’ efforts to strengthen their capital to levels prescribed by the Single Supervisory Mechanism and the Bank of Greece.

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