According to the Greek financial newspaper Kefalaio, foreign investors holding large Greek bank shares are due in Athens on February 28th for a series of meetings with high level Greek officials, which include Prime Minister Alexis Tsipras.
According to the same source, the reason for their visit is related to the current instability in the world economy but also because they want to seek reassurances from the Greek government about its intentions regarding the status of Greek banks and to get a feel for expectations about economic recovery.
On top of foreign investors’ concerns are also the “red” loans haunting the Greek banking sector as a resolution to non-performing loans (NPL) is the key to lenders returning to profitability. They are also expected to pressure for a loosening of capital controls, but this is an issue that the Greek government seems to have little confidence in addressing. The problem is that it is unsure if loosening capital controls won’t result in massive withdrawals of cash by Greek citizens.
All in all, critical challenges will most likely remain in place for Greece’s banking sector as prospects for economic recovery remain dismal. As of recent Credit Suisse put it thusly, “While we see upside potential for all four Greek banks, we see significant risks in the macro and political outlook, and the ability of the banks to restructure NPL.”
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