Three systemic banks’ core capital at or below 8%

Three out of Greece’s four main banks showed core capital ratios falling to 8% or lower under an adverse scenario in the European Central Bank’s latest health check of second-tier banks, according to the results that were issued on Friday.

National Bank showed a Common Equity Tier 1 (CET1) ratio of 6.4% in the worst-case scenario under the stress test, while Piraeus Bank came in at 6.5% and Eurobank stood at 8%.

Only Alpha Bank avoided the lowest category in the test, with a CET1 ratio of 8.4% in the adverse scenario.

All four banks have been reducing their large stock of impaired loans, built up during Greece’s decade-long financial crisis and, of the four, only Eurobank has not undertaken capital raising measures this year.

Piraeus said that the stress test exercise did not incorporate initiatives introduced since the end of 2020, which included a 1.38 billion-euro capital increase and a €600 million Tier 1 bond sold in the second quarter of the year.

Alpha Bank carried out an €800 million share placement in June, while National Bank agreed to sell its insurance arm for €500 million in March.

[Reuters]