Divestment from banks earns Greece 3.5 bln euros

Greece determines the benefit of the state from its divestment from the systemic banks at 3.5 billion euros.

National Economy and Finance Minister Kostis Hatzidakis told a parliamentary committee on Monday that the government opted for the long-term benefit in stead of the short-term one, prioritizing “saving Greek deposits, as well as Greek businesses and households from a more comprehensive collapse and crisis.”

Speaking to the Economic Affairs Committee in the Parliament, Hatzidakis responded to criticism of the opposition, according to which the divestment should not take place now, arguing that “we took advantage of the opportunities presented in the wider context,” such as the favorable conditions.

He noted: “The divestment comes after the recovery of the investment grade, the high growth rates and the positive course of most of the main parameters of the economy.”

According to the minister, “ignoring the positive situation would be an unjustified frivolity, a risk that no one needed to take given the increased geopolitical conditions and international instability.”

The €3.5 billion euros for the state includes the benefit that has come from the private sector involvement (PSI), as according to the minister, “the state should have returned to the banks almost €60 billion from the purchase of bonds,” but due to PSI it returned half of that, “something that cannot be ignored in any approach to this issue,” as he underlined.

In the documentation presented in a speech by the Governor of the Bank of Greece, Yannis Stournaras,on Monday, the benefit through the PSI is determined at €38.5 billion, which together with other revenues of the Hellenic Financial Stability Fund (HFSF) add up to €53.7 billion to date. Correspondingly to the part of the costs, the expenses for the recapitalizations, etc. amounted to €50.3 billion.

Specifically, state revenues include:

• The total benefit from PSI amounting to €38.3 billion.

• The dividends of the Bank of Greece from the extraordinary income of the emergency liquidity assistance (ELA), amounting to €5.5 billion.

• The income of the HFSF from the share capital increases of the period 2012-2023 and the distribution of warrants amounting to €1.1 billion.

• The income of the HFSF from the convertible bonds (CoCos) amounting to €2.7 billion.

• The HFSF’s income from the recent divestments of €2.8 billion.

• The cumulative collections of the HFSF from banks under liquidation amounting to €878 million.

• The €1.7 billion valuation of the HFSF holdings.

• The estimated recoverable amounts of the HFSF from banks under liquidation amounting to €752 million.

Accordingly, the state’s expense is estimated at €50.3 billion and includes:

• The 2012-2013 recapitalization of major banks by the HFSF amounting to €25.5 billion.

• The contribution of the HFSF to the consolidation of non-systemic banks amounting to €14.4 billion.

• The participation of the HFSF in the share capital increases and CoCos of systemic banks in 2015, amounting to €5.4 billion.

• The participation of the HFSF in share capital increases in Alpha and Piraeus in 2021, amounting to €440 million.

• The participation of the HFSF in the share capital increase of Attica Bank, amounting to €480 million.

• The conversion of deferred tax credit (DTC) to Attica Bank to the amount of €239 million.

• The depreciation of DTC amounting to €3.8 billion.