16/12/2015 08:58
The high level of NPLs still plaguing Greece and especially Cyprus seems to be taking its toll on bank shares as evident by their capitalisations.
With the two countries having the highest NPL ratios in Europe, an overall uncertainty about their banking sector still prevails exerting considerable pressure on the share prices of the four systemic Greek banks and the two Cypriot publicly traded systemic banks.
Although the recapitalization needs identified for the four systemic Greek banks were quite lower than what was initially expected, the especially low prices at which the new shares were offered, led investors to their selloff.
The introduction of the new shares that started last week and concluded on Monday with the trading of the new shares of the National bank of Greece, intensified selling activity resulting in the banking shares reaching new lows.
Although on Monday there was a healthy recovery for ALPHA, EUROB and TPEIR, ETE ended the session with maximum losses shedding 30%.
Indicative of the prevailing situation is the fact that at current market prices the implied capitalizations barely cover the funds raised during the new issues of just a couple of weeks ago while in the case of TPEIR it is even less.
Prices of the Cypriot bank shares are lately experiencing downward pressures as well.
BOCY's remarkable recent price increase due to purchases by a number of its board members, proved short lived as it later succumbed to the overall trend, recently reaching new lows since it started trading again about a year ago.
HB continues to hover at low levels amid a general downward trend that started about three months ago.
So far the pace of reducing NPLs appears too slow pointing to a rather time consuming process suggesting that the main source of uncertainty will be present for quite some time.
The strengthening of the related legislative framework in Cyprus and efforts in Greece to address the NPLs problem give a ray of hope that the situation will turn around in the foreseeable future.
With the two countries having the highest NPL ratios in Europe, an overall uncertainty about their banking sector still prevails exerting considerable pressure on the share prices of the four systemic Greek banks and the two Cypriot publicly traded systemic banks.
Although the recapitalization needs identified for the four systemic Greek banks were quite lower than what was initially expected, the especially low prices at which the new shares were offered, led investors to their selloff.
The introduction of the new shares that started last week and concluded on Monday with the trading of the new shares of the National bank of Greece, intensified selling activity resulting in the banking shares reaching new lows.Although on Monday there was a healthy recovery for ALPHA, EUROB and TPEIR, ETE ended the session with maximum losses shedding 30%.
Indicative of the prevailing situation is the fact that at current market prices the implied capitalizations barely cover the funds raised during the new issues of just a couple of weeks ago while in the case of TPEIR it is even less.
Prices of the Cypriot bank shares are lately experiencing downward pressures as well.
BOCY's remarkable recent price increase due to purchases by a number of its board members, proved short lived as it later succumbed to the overall trend, recently reaching new lows since it started trading again about a year ago.
HB continues to hover at low levels amid a general downward trend that started about three months ago.
So far the pace of reducing NPLs appears too slow pointing to a rather time consuming process suggesting that the main source of uncertainty will be present for quite some time.
The strengthening of the related legislative framework in Cyprus and efforts in Greece to address the NPLs problem give a ray of hope that the situation will turn around in the foreseeable future.
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