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Bank of Greece Report: Attica Bank Mired in Discrepancies

trapeza-attikis-1000The Bank of Greece probe of Attica Bank uncovered at least 30 serious discrepancies in its administration and operations, and a report is submitted to parliament.
According to the report, there are several shortfalls in Attica Bank‘s administrative and business operations, in risk management, in its information technology systems and, more importantly, in its recapitalization.
Specifically, certain state-controlled companies – such as EYDAP water company, Athens International Airport and the TAPILTAT bank employees security fund – contributed 85 million euros combined in the lender’s recent recapitalization. However, the European Commission might reject the contributions as state subsidies participation of state-controlled corporations.
According to employees, pensioners and unionists of the TAPITALT fund, the participation of the fund took place after pressure from Deputy Labor Minister Tasos Petropoulos.
Also, another major discrepancy is that 65 million euros for the bank’s recapitalization came from businesses that had taken loans from Attica Bank that equalled the amount of the share increase.
The BoG probe also found preferential treatment of certain business groups. Attica Bank was giving out loans to those businesses even during capital controls, at a time when capital controls were imposed and deposits had dropped tremendously. Furthermore, the bank was lending to problematic businesses. Specifically, between December 2014 and end of March 2016, Attica Bank gave out 400 million euros in loans while deposit outflows were at 1.2 billion euros.
Furthermore, the composition of the lender’s executive board was problematic, resulting in many problems and errors.
The BoG probe also showed that Attica Bank had recently raised the credit limit of Toxotis construction company from 10 million to 100 million euros, despite its low credit rating. Toxotis owner Christos Kalogritsas is one of the four licensees in the recent controversial television license auction. Allegedly, the constructor, has preferential treatment from the government getting most of public works contracts. Since 2015, Kalogritsas, his son and two daughters were probed for tax evasion and money laundering for 33 million euros combined.

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