National Bank to eliminate ELA funding in 2018, CEO says

National Bank to eliminate ELA funding in 2018, CEO says

National Bank expects to eliminate ELA funding some time in 2018, Leonidas Fragiadakis, the bank’s CEO told Reuters in an interview on Tuesday.

“We are on a trajectory that will eliminate ELA funding some time in 2018,” Fragiadakis said. “We are also confident that we will be profitable this year and meet our NPE (non-performing exposures) reduction targets.” National Bank has reduced its borrowing from the Greek central bank’s emergency funding window (ELA) to 5.8 billion euros and expects to shrink it further next year.

Greece’s second-largest lender National Bank (NBG) (NBGr.AT) will sell more assets in the Balkans, including its Romanian operations, to complete a restructuring plan agreed with European authorities, its chief executive said.

Like other big Greek banks, NBG has been slimming down by divesting assets and foreign subsidiaries to focus on banking at home, with proceeds boosting capital ratios and liquidity.

“We are very close to announcing the buyer for Banca Romaneasca,” CEO Leonidas Fragiadakis told Reuters in an interview. “The sale will be concluded in the next few months, it will be capital-accretive and beneficial to liquidity.” He said Credit Suisse was advising the group on the sale.

Apart from Romaneasca, Fragiadakis said NBG would sell smaller operations in Serbia, Albania and Cyprus as part of commitments agreed with regulators.

“More than 90 percent of our restructuring has been completed. These operations make up a very small part of the commitments in the plan,” he said, adding sales processes were underway.

The divestments boosted NBG’s core equity tier-1 capital ratio by 750 basis points and the sale of the insurance unit lifted it by another 110 basis points to close to 18 percent. This provides NBG with a significant capital cushion ahead of another round of pan-European stress tests by the European Central Bank next year, which Fragiadakis said “certainly will not pose a problem” for the group.

NBG, 40 percent owned by the country’s bank rescue fund HFSF after three rounds of recapitalisation, will focus on its home market to help “tow the economy out of the quicksand of recession towards recovery.”

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