BANKS

Although the Hercules proposal has been by cleared by DG Comp, the ECB's Single Supervisory Mechanism (SSM) has raised a series of objections on it, with the most important one being that it cannot place a zero risk weighting on securitizations backed by a state that does not have an investment credit grade.

Intrum aims for a long-term investment in Greece, Mikael Ericson the company's CEO said on Friday. Speaking to reporters in Athens, Ericson expressed his satisfaction over the quality of the human resources and of the management team of Intrum in Greece and noted that the aim of Intrum Hellas was the offer long-term and sustainable repayment solutions to Piraeus Bank's debtors, while it also aspires to take over the management of third-party portfolios in the future.

Greek bank shares are returning to levels not seen since the sector's third round of recapitalizations took place in 2015, while 2020 looks like it will be the year when big improvements to their balance sheets are seen. Bank shares may be back at the forefront this year, rising 100 percent on an annual basis, but they continue to trade at prices below rights issues completed in 2015 as part of the third recapitalization plan.

The recent bank charges that have been imposed on most transactions are expected to be discussed, among other things, in a meeting on today between the heads of the country’s biggest banks and Prime Minister Kyriakos Mitsotakis.

Talks are continuing on ways to improve a plan being put together by Greece to help banks reduce bad loans, called the Hercules proposal, in a bid to prevent it from being a lost opportunity for the country and its financial system.

The European Commission has found Greek plans aimed at supporting the reduction of non-performing loans of Greek banks to be free of any State aid. The Commission found that, under the asset protection scheme (known by the name of “Hercules”), the Greek State will be remunerated in line with market conditions for the risk it will assume by granting a guarantee on securitised non-performing loans.

A number of fund managers believed recently that Greek banks had turned the corner and started building positions in the sector. But most of them now looking over their portfolios in disappointment, realizing that there is a massive gap between preparing a proposal that will improve the balance sheets of lenders and implementing it. What did go wrong.

Eurobank, Greece's third-largest lender, is holding talks exclusively with US fund manager Pimco on the sale of its Financial Planning Services (FPS) unit, sources tell Business Daily, ruling out negotiations with any other potential buyer. The deal relates to Eurobank's FPS unit, the lender's loan recovery business, and includes its Cairo portfolio of sour debt worth 7.4 billion euros.

Greece's Finance Minister Christos Staikouras is scheduled to meet on Thursday afternoon with the heads of the country's banks to discuss the Hercules bad loan plan in a bid to secure the highest participation from lenders and reduce the risk of fresh uncertainty hitting the sector. The meeting comes after a report from Business Daily showing that the technical details of the plan submitted by Greece to the European Commission have not been approved by the European Central Bank's Single Supervisory Mechanism (SSM).

Greek banks are closely watching developments regarding the plan that has been prepared by Deputy Finance Minister George Zavvos. It is seen getting the green light from the European Commission but will not be able to be implemented due to many technical difficulties.