BoG governor: Greek Banks Adequately Capitalized, Challenges Remain

After three rounds of recapitalizations, Greek banks have among the highest rates of capital adequacy in the Eurozone and adequate capital reserves to absorb any additional credit losses, as shown in the stress tests results, Yiannis Stournaras, governor of the Bank of Greece (BoG), said on Friday.

They have also significantly improved their liquidity, reducing their dependence from central bank funding, regaining access in the interbank market and issuing covered bonds, while banks also report a gradual return of deposits, the BoG chief said, addressing a congress organized by the central bank.

Stournaras noted, however, that the rate of non-performing exposures to total exposures remained high and this was the most important challenge for the Greek banking sector. He said that banks' efforts to lower NPEs have begun bearing fruit, as the stock of NPEs fell to 88.6 billion euros at the end of June 2018 (47.6 pct of total exposures), down 18.6 billion euros or 17.3 pct from its peak in March 2016.