Eurobank: Consolidation In The Greek Banking Sector

Eurobank: Consolidation In The Greek Banking Sector

Consolidation In The Greek Banking Sector by Eurobank from Ben Graham Centre Conference.

Macroeconomic update

Adjustment program achievements & socioeconomic costs

Play Quizzes 4

Notable progress in correcting macro imbalances

  • Twin deficits nearly eliminated
  • Price competitiveness restored (Unit Labor Costs in Real Effective Exchange Rates back to pre-Euro entry levels)
  • Average maturity of Greek public debt extended significantly (c. 16.5 years currently vs. 6.3 years in 2011)
  • Effective interest rate on debt stock currently below 3 percent, among the lowest in the euro area
  • Real GDP up 0.7% in 2014 following 25ppts contraction in prior 6 years But, fiscal adjustment heavily front-loaded and progress on structural reforms broadly uneven
  • Adjustment in consumer prices has seriously lagged behind adjustment in wages, putting additional pressure on incomes
  • Current account adjustment mainly driven by imports compression
  • Goods exports performance improving lately, but not yet in line with huge adjustment in relative Unit Labor Costs
  • Unemployment still at very high levels, despite last year’s 2ppts improvement (26% in December)
  • Problem exacerbated by weak social net e.g. limited jobless benefits and health care to long-term unemployed

Twin deficits eliminated

Morningstar Investment Conference: Everything You Need To Know About Preferred Securities

Arena Investors Chilton Capital Management Schonfeld Strategic Advisors Robert Atchinson Phillip Gross favorite hedge fundsPreferred stock has been around for more than 150 years. One study suggests that the first shares of preferred stock were issued in 1836 by internal improvement companies in Maryland. However, some investors might not have given this asset class much thought until the government commandeered preferred shareholders' dividends in the government-sponsored enterprises Fannie Mae Read More

  • Positive current account (CA) balances in 2013 & 2014 for the first time on record (since 1952)
  • CA adjustment mainly due to sharply lower imports and, to a lesser extent, higher services exports (tourism)
  • Fiscal adjustment in last 5 years unprecedented by historical standards
  • Structural primary balance improved by more than 19ppts-of-GDP since 2009
  • Greece’s cyclically adjusted primary balance was the highest in the euro area in 2014

Notable improvement in domestic economic activity in 2014

  • Real GDP up 0.7% in 2014, with strong gains recorded in most expenditure-side components
  • Positive private consumption growth following 5 consecutive years of steep declines
  • Notable improvement of investment activity in 2H 2014 (+11.3% Y-o-Y), mostly reflecting strong gains in investment spending on tools, machinery and transportation equipment

Real GDP Greek Banking Sector

Serviceability of Greek public debt improved considerably

  • Serviceability of Greek public debt has improved considerably following the 2012 debt restructuring (PSI) & debt buyback as well as the relief package decided at the Nov. 2012 Eurogroup
  • Rise in debt ratio since 2009 (by 48ppts-of-GDP) entirely due to the economic recession
  • Snow ball effect to start automatically reducing the debt ratio once nominal GDP growth rises above 2.5 percent

debt ratio Greek Banking Sector

See full slides below.

Updated on

Sheeraz is our COO (Chief - Operations), his primary duty is curating and editing of ValueWalk. He is main reason behind the rapid growth of the business. Sheeraz previously ran a taxation firm. He is an expert in technology, he has over 5.5 years of design, development and roll-out experience for SEO and SEM. - Email: sraza(at)
Previous article GrubHub: Analysts Bullish On Restaurant Opportunities
Next article Activist Stocks: Alliance Trust, Panera Bread, Rovi, Altisource

No posts to display