Who remembers why, Karatzas and Kostopoulos, now that systemic banks come out of the “mantri”

With the completion of the departure of the TSF from Piraeus – and despite the rest of the TSF in the National Bank – it is now a general assessment that by doing so, the state bailout phase of the domestic banking system is closed. And the banks are going back out with their own powers in the market and in the open game… The term “their powers” may not yet be accurate – as long as the deferred tax remains outstanding – but again all sides, both the public and the old shareholders of the banks and the new shareholders (i.e. the market), with the prices achieved by Piraeus show that they believe that the page has turned permanently. The truth is that the process of denationalisation of banks is the second part of the implementation of the restructuring of (public and private) debt, an economic “size” that has not had its precedent in the economic history of the system in the last century. The public arm of this story ‘closed’ as known by the final wording of the June 2018 restructuring agreement. And the private arm “closes” now – after Hercules and upgrade to IG – with the withdrawal of the TSS from the four systemic banks. Of course both strands to be precise have their “tails”. The public arm draws with it the open issue with the thick package of ‘delayed interest’ of EUR 25 billion (which concerns the period of grace of the repayment of loans), to be paid by 31.12.2031, alongside debt service. The private arm, in addition to the concern about the “lucky” that the Npls securitisations will have, the outstanding issue concerns the fact that almost half of the own funds, if we are not mistaken, of banks are the “delayed taxes” which at some point on the visible horizon must be clarified, as SSM does not cease to recall… With them and with them, however, we arrived last week in a situation where institutional investors made… a line to secure a share from Piraeus. And even with a share price higher than the stock market price on the same day. You’ll say everything looks good and… optimistic. If the world were limited to this part of reality, everyone would agree to this appreciation. But the truth is that banking system supervisors and especially SSM know that uncertainty defines the new economic reality. The sources of profitability of banks, due to the overall situation of the economy in the Eurozone, shrink and cannot rely on the growth factor, at least on the visible horizon… That’s why the pressure from Mrs. Buch to avoid “sattle” profits in dividends, such as its basic pattern. But because it is not right to spoil the fine climate that has been created – and indirectly affects fiscal stability – a “mark” of dividend that will move between 5 and 9 minutes (!) seems to be a possible temporary area of compromise with low relative costs … But in this climate it has started, from a few are true sides, to raise another issue. A global strategic issue linked to the completion of the resolution of the banking system. The domestic banking system comes out of a long period of huge domestic “destruction” data of public and private capital. And it is now beginning to move more and more in open market terms. But the question is, “with what strategy?” Which way will he move next period of uncertainty? The bankers of the generation of Kostopoulos and Karatzas with the well-known “visions”, associated with the great transcendence of domestic structural deficiencies through integration into the Euro and exit to the Balkans, have disappeared. … Along with their visions. Now the four systemic banks that survived this great adventure “get out of the corral”, but where will they move? The answer to the question does not exist at present, either at the level of the banking strategy or at the level of the economic perspective. And this is a matter more important than the size of temporary difficult… visible dividends.