19/08/2015 10:09
The subsidiaries of the Greek banks in Cyprus have returned to calmness, after the agreement of the Greek government with its creditors for a new financing of €86 bn.
The agreement prevents the worst for the Greek banks, which faced the possibility of a bail-in of their depositors through the consolidation tools introduced with the prerequisites of July.
With last week’s agreement, the bail-in will be done for the bondholders of the banks and the recapitalization of banks will be done in the coming months, rather than abruptly, thus giving time to banks to assess their balance sheets and prepare their plans.
The agreement prevents extreme scenarios, said senior executives of the Greek subsidiaries in Cyprus, which until the end of March had deposits of €7.7 bn and loans of €7 bn in Cyprus.
“Greece is entering a memorandum course which is a very encouraging development for the stabilization of the economy and the country's banking system” says Giorgos Georgiou, CEO of Alpha Bank Cyprus.
“Things return to calmness” says Mr. Georgiou, as “Greece remains in the euro under a financial program to be able to be back on track again”.
This development has a positive effect on the subsidiary of Alpha Bank in Cyprus, he added.
Marios Savvides, Deputy Chief Executive Officer of Piraeus Bank notes that although there is no interconnection of the Greek bank subsidiaries in Cyprus with their parent due to the measures taken by the Central Bank of Cyprus, this development is extremely positive.
“Some concerns that normally existed are now eliminated. The whole climate that has been formed after the agreement of Athens with the international lenders has changed for the better”, says Mr. Savvides.
“The agreement” he added “is still an additional reassurance that Greece is in a consolidation path”.
CEO of Eurobank Cyprus Michalis Louis described the signing of the memorandum of Athens and the institutions as a “huge step”.
He stressed the need for the implementation of the loan agreement, noting that the challenge for the country's credibility will be earned with the implementation of the agreed and amid reviews of the economic program of Greece.
“I estimate that there is complete calmness in the banking environment of the subsidiaries, something that we experience every day with our contact with the customers”, Mr. Louis observed.
He referred to the positive financial results of the bank in the first quarter and the positive indications for the six-month results.
The CB, even before the imposition of capital controls in Greek banks in June, had taken a series of measures to protect the subsidiaries of the Greek banks in Cyprus and one of the extreme scenarios that were examined was their sale to Cypriot banks.
At this stage, the CB believes that the funds and the liquidity of the subsidiaries of the Greek banks in Cyprus are sufficient.
As the risk from Greece is being eliminated, banks begin to return to the operational plans that were drawn up before the outbreak of the latest phase of the Greek crisis.
The course of recovery of the economy gives bankers margin for gradual implementation of their plans, despite the political uncertainty that continues to exist in Greece.
The four subsidiaries of the Greek banks employ around 1700 persons working in 58 branches across Cyprus.
The agreement prevents the worst for the Greek banks, which faced the possibility of a bail-in of their depositors through the consolidation tools introduced with the prerequisites of July.
With last week’s agreement, the bail-in will be done for the bondholders of the banks and the recapitalization of banks will be done in the coming months, rather than abruptly, thus giving time to banks to assess their balance sheets and prepare their plans.
The agreement prevents extreme scenarios, said senior executives of the Greek subsidiaries in Cyprus, which until the end of March had deposits of €7.7 bn and loans of €7 bn in Cyprus.
“Greece is entering a memorandum course which is a very encouraging development for the stabilization of the economy and the country's banking system” says Giorgos Georgiou, CEO of Alpha Bank Cyprus.
“Things return to calmness” says Mr. Georgiou, as “Greece remains in the euro under a financial program to be able to be back on track again”.
This development has a positive effect on the subsidiary of Alpha Bank in Cyprus, he added.
Marios Savvides, Deputy Chief Executive Officer of Piraeus Bank notes that although there is no interconnection of the Greek bank subsidiaries in Cyprus with their parent due to the measures taken by the Central Bank of Cyprus, this development is extremely positive.
“Some concerns that normally existed are now eliminated. The whole climate that has been formed after the agreement of Athens with the international lenders has changed for the better”, says Mr. Savvides.
“The agreement” he added “is still an additional reassurance that Greece is in a consolidation path”.
CEO of Eurobank Cyprus Michalis Louis described the signing of the memorandum of Athens and the institutions as a “huge step”.
He stressed the need for the implementation of the loan agreement, noting that the challenge for the country's credibility will be earned with the implementation of the agreed and amid reviews of the economic program of Greece.
“I estimate that there is complete calmness in the banking environment of the subsidiaries, something that we experience every day with our contact with the customers”, Mr. Louis observed.
He referred to the positive financial results of the bank in the first quarter and the positive indications for the six-month results.
The CB, even before the imposition of capital controls in Greek banks in June, had taken a series of measures to protect the subsidiaries of the Greek banks in Cyprus and one of the extreme scenarios that were examined was their sale to Cypriot banks.
At this stage, the CB believes that the funds and the liquidity of the subsidiaries of the Greek banks in Cyprus are sufficient.
As the risk from Greece is being eliminated, banks begin to return to the operational plans that were drawn up before the outbreak of the latest phase of the Greek crisis.
The course of recovery of the economy gives bankers margin for gradual implementation of their plans, despite the political uncertainty that continues to exist in Greece.
The four subsidiaries of the Greek banks employ around 1700 persons working in 58 branches across Cyprus.