Of Special Interest
22nd June 2012
BlackRock forecasts Greek loan writeoff at €30bn
Panagiotis Roumeliotis, non-executive vice chairman at Piraeus Bank, and former Greek IMF representative said in a speech to a risk conference, "The expected losses (for Greek banks) from impaired loans were set by Blackrock, based on stress scenarios, at 30 billion euros in the next three years,". BlackRock was hired by the Bank of Greece to carry out an independent assessment of the banks loan book under stress conditions. Roumeliotis added, that the sum was a gross amount and that Greek banks had already provisions of around €18bn to cover part of these losses.
The BlackRock study report has not been officially published. The central bank said that it was expected to be released "in the near future".
NPL was 15.9% at 2011 year end and expected to be higher now. The details of the stress model used by BlackRock has not been made public. It would appear surprising that given more austerity measures to come, a sharper fall in GDP than originally forecast, and possible exit from the Euro that a mere €12bn of additional provisions is all that is required from the banks.