Bank of Greece probe finds major discrepancies in Attica Bank

Bank of Greece findings from its probe of Attica Bank include at least 30 serious discrepancies, Kathimerini understands. The central bank report, which has been submitted to Parliament, identifies significant shortfalls in the lenders’ administrative and business operation, in risk management, in the operation of its information technology systems and in its recapitalization.

Sources say that an amount of some 85 million euros of the 681-million-euro share capital increase is under scrutiny by the European Commission and could be rejected as a state subsidy since it concerns the participation of state-controlled corporations. These are Athens International Airport (9.9 million euros), the EYDAP water company (20 million) and the TAPILTAT bank employee fund (55 million). Employees, pensioners and unionists at the fund claim that its participation in the Attica increase only took place because of the intervention of Deputy Labor Minister Tasos Petropoulos.

The share increase money also included 65 million euros from loans the bank itself had issued to entrepreneurs so that they could take part in its recapitalization (which occurred in other banks as well).

The BoG also discovered privileged financing of certain business groups, in a period of capital controls and even though Attica was experiencing a disproportionately high drop in deposits. The loans further went to enterprises which, according to independent credit assessment,s were on the brink of going under. Figures from end-2014 to end-March 2016 showed Attica issued loans of over 400 million euros, mainly to business groups, while its deposits were shrinking rapidly, dropping by over 1.2 billion euros.

The report identified an insufficient composition and inefficient operation of the governing board, which has now been replaced, problems and errors in the management and classification of bad loans, a lack of coordination in strategic investment on IT systems, etc.

Particularly in the case of the Toxotis construction firm owned by new national TV station licensee Christos Kalogritsas, the BoG found that his credit limit was raised from 10 million to 100 million euros last year, without taking into account his particularly low credit rating.