Main Greek bank stocks slump by a quarter

ATHENS (AFP) - The shares of Greece’s four main banks lost more than a quarter of their value on Wednesday after the new hard left government pushed its demand for debt relief.

At the end of a turbulent day on the Athens stock market, Piraeus Bank closed down 29.3 per cent, Alpha Bank shed 26.8 per cent, Eurobank slid 25.9 per cent and National Bank was down 25.5 per cent.

Overall Greek stocks slumped 9.2 per cent to their lowest level since June 2012, closing at 711 points compared with 783 points on Tuesday.

The market fell after the new government of Prime Minister Alexis Tsipras on Wednesday scrapped key privatisation tenders, including for the ports of Piraeus and Thessaloniki, and pressed home its demand for a renegotiation of Greece’s 240 billion euro (S$367 billion) EU-IMF bailout.

The same quartet of banks have been recapitalised twice since the debt crisis began in 2010.

As recently as Jan 21 this year – just four days before the snap general election – the four banks requested European temporary liquidity injections, known as emergency liquidity assistance (ELA).

The amount they asked for has not been revealed, but the banks stressed it was a precautionary measure. Their requests are expected to be considered by the European Central Bank.

Christopher Dembik, a Paris-based economist at Saxo Bank, said the first steps of the radical anti-austerity Greek government were causing fresh nervousness, but the structural problems of Greek banks were deep-rooted.

“Investors are worried about the state of the banks but they have been doing badly since the start of the debt crisis because the sector has never really been re-structured, unlike what has been done in Spain,” he said.

Yields on Greek 10-year bonds also rose above the symbolic barrier of 10 per cent on Wednesday.