by SCH
Neoliberal
dictatorship representatives in Greece continue to spread the
propaganda concerning the Greek banks. Various mouthpieces continue
to propagate the false perception that the Greek banks are, at the
moment, under the state control and some of them claim that this is a
proof of the Soviet function of the economy!
The
mouthpieces propagate that this is the reason for which they must be
privatized again, so that the state should not have the
responsibility of their recapitalization and relief taxpayers from
such an additional load. In reality, the only thing that will change,
according to the best scenario, are the names of the private
financial institutions and investors that will take control of the
so-called "systemic" banks in the future, while the Greek
public will be left with an additional debt.
The
purely private nature of the Hellenic Financial Stability Fund (HFSF)
From
the HFSF website and the Annual Report for the period 21/7/2010 –
31/12/2011:
“The
Hellenic Financial Stability Fund (hereinafter the “Fund” or
“HFSF”) was founded in July 2010 (under Law
3864/2010) as a
private legal entity and does not belong to the public sector. It has
administrative and financial
autonomy, operates exclusively under
the rules of the private economy and is governed by the
provisions of the
founding law as applicable. In addition, the
provisions of company law 2190/1920 are applied as in force,
provided
they are not contrary to the provisions and the objectives
of the founding law of the Fund. The purely private nature
of the Fund is neither affected by its entire capital being
subscribed by the Greek government, nor by the issuance of
the
relevant decisions by the Minister of Finance.”
“In
addition, the Fund may provide guarantees to states, international
organizations or other beneficiaries and in
general may
take any action necessary for implementing the decisions made by the
bodies of the eurozone with a
view to supporting the Greek
economy.”
Funds
for the HFSF
Under
the title “Post Balance Sheet Events”, p. 5-6:
“On
15/03/2012 The European Financial Stability Facility (hereinafter
EFSF), the Greek State, the Fund and the
BoG, signed the “Master
Financial Assistance Facility Agreement” amounting to a total of €
109 billion and
the Fund guarantees on behalf of the Greek State the
amount which will be used for the recapitalization of
the credit
institutions.
On 17/04/2012 the Fund signed with the Greek State and
the BoG the Acceptance Notice for the deposit EFSF
bonds into the
Fund’s account amounting to a total of € 25 billion, which
pertain to the recapitalization and
revitalization of the credit
institutions. The Fund’s share capital as of the
financial statements’ approval date stood at € 26.5 billion (€
1.5 billion in
initial capital and € 25 billion from an additional
capital increase on 19/04/2012). The capital increase took
place
with the contribution of floating rate notes (FRNs) issued by the
EFSF.”
Under
the title “Prospects”, p.6:
“In
the following months, it is anticipated that the banks’
recapitalisation will start and will also be the Fund’s main
activity for 2012. In order to respond to the capital requirements,
the Fund has been reinforced with capital
amounting to €
25 billion and is expected to be further enhanced (total authorized
capital: € 50 billion), in the context
of the loan agreement
signed between the HFSF and the Republic of Greece.”
Also,
according to the “Note 10”, p.29:
“The
authorised share capital, according to amended L. 3864/10, amounts to
€ 50 billion resulting from funds which
will be raised as part of
the mechanism put in place by the European Union and the IMF to
support Greece according
to L. 3845/2010, and which
will be gradually covered from the Greek government
and included in non-transferable
titles until the expiry of the
HFSF. As of 31/12/2011 the paid in share capital totaled €
1.5 billion.”
Participation
of the HFSF to the Greek “systemic” banks
From
the Annual Report for the period 1/1/2012 – 31/12/2012:
“In
the context of the settlement of the recapitalization, Piraeus Bank
returned EFSF FRNs of nominal amount € 499.5m to the HFSF while
following the delivery of 4,109,040,164 common
registered shares the
HFSF’s shareholding in Piraeus Bank reached 81.01%.”
“Given
that the EFSF FRNs already held by Alpha
Bank as an advance for its
capital increase amounted to € 2,942.0m (nominal amount) the HFSF
contributed additional
EFSF FRNs of a nominal amount totaling €
1,018.5m. Therefore the total nominal amount of EFSF FRNs given to
Alpha
Bank were € 3,960.5 and their fair value as of 30/05/2013
was € 4,021.0m. Following the delivery of 9,138,636,364
common
registered shares to the HFSF, its shareholding in Alpha Bank stands
at 83.70%.”
“Based
on the subscription in cash which
reached € 1,079.1m (11% of
total) and the fair value of the EFSF FRNs already contributed, NBG
returned to the HFSF
EFSF FRNs of nominal amount of € 1,291.7m.
Following the delivery of 2,022,579,237 common registered shares to
the HFSF, its shareholding in NBG stands at 84.39%.”
“Following
the fair valuation performed on the contributed EFSF FRNs, Eurobank
returned to the Fund EFSF FRNs with a
nominal amount of € 113.2m.
Following the delivery of Eurobank’s shares to the HFSF
(3,789,317,358 common
registered shares), the HFSF’s shareholding
in Eurobank stood at 98.56%.”
According
to the Piraeus bank website, the HFSF held 81% of the
outstanding common shares on September 30, 2013, while the Greek
Public does not appear anywhere in the shareholder structure of the
bank.
According
to the Alpha bank website, the HFSF holds 8,925,267,781 common,
registered, voting, dematerialized shares, which correspond to 81.71%
of the total number of voting shares of the bank on Dec. 31, 2013,
while the Greek Public does not appear anywhere in the shareholder
structure of the bank.
According
to the National Bank of Greece website, on June 30, 2013 shareholders
structure, HFSF held 84.4% of the shares while 1% held by “domestic
pension funds” and 1.7% by “domestic private and public sector
companies”.
According
to the Eurobank website, on Nov. 14, 2013, the participation of the
HFSF to the bank was 95.2%.
BoD composition of the “systemic” banks
Piraeus
Bank: 12 of the 16 members of the current board, among them chairman
Michael Sallas,
were
also members since 09/02/11, thus quite long before HFSF
participation to the bank. There are two representatives from the
HFSF and only one from the Greek Public who, according to the bank's
website, are not considered members of the board.
Alpha
Bank: All members of the current board, among them chairman Yannis
Costopoulos, were also members long before HFSF participation to the
bank. There is one representative from the HFSF and only one from the
Greek Public.
National
Bank of Greece: 8 of the 13 members of the current board, were
members long before HFSF participation to the bank, while it is not
clear whether the rest 5 members since 2012, among them chairman
George Zanias, had become members before or after HFSF participation.
There is one representative of the HFSF and only one from the Greek
Public.
Eurobank:
A new BoD was appointed by the HFSF General Council following a
selection process held by an international HR
consultant. However,
6 from the 9 members of the new board were also members of the
previous BoD consisted of 18 members. There is one representative of
the HFSF and only one from the Greek Public.
Conclusions
From
the information above, the conclusions are:
- Most executives of the four “systemic” banks are still members of the boards after the HFSF participation, despite that the Fund holds now the significantly higher percentage of the shares in all of them.
- Concerning the four “systemic banks”, a new BoD was appointed by the HFSF only in the case of Eurobank at the time where the Fund held 98.56% (now 95.2%) of the shares.
- HFSF itself is a purely private institution in which the Greek Public has no power.
- Greek Public's presence in the shareholder composition of the four “systemic” banks is minimal or zero.
- Greek Public's presence in the BoDs of the four “systemic” banks through representatives is minimal.
It
is proven that, the only "public" in the Greek banks are
the guarantees by the Greek Public for their recapitalization. This
means that, despite that the Greek Public has no power on banks'
decisions and their investment choices, it will be called to pay the
interest for the loans in the context of the loan agreement between
Troika lenders and Greece.
It
also means that, no one is able to protect the Greek Public from an
additional damage in case that HFSF sell its shares to other banks or
investors after a possible share-price significant fall.
It
also means that, no one can guarantee deposits, especially after the
decisions of the recent EU Summit and ECOFIN for the bail-in, while
in case of a new banking crisis, HFSF will suffer significant damage
- in case that will still hold the largest part of the banks' shares
- because according to the bail-in "rules", shareholders
must also participate in the bank rescue. Therefore, according to the
best scenario, the Greek Public, as guarantor of the HFSF, will be
forced to sign a new loan agreement to cover additional damage thus
loaded with additional debt.
So
finally, the only "public" in Greek banks is the debt that
will be loaded on future generations!
Sources:
Comments
Post a Comment