DB: “Greek Elections Should Hold Marginal Implications For Banks”

“Pending to know the final outcome of the elections, the possible coalitions and keeping in mind that the two major parties do not have clear differences in policies/programs, the main risk is that Greece could be dragged into a prolonged election process assuming no party manages to win majority and form a government,” Deutsche Bank says in a special report.

It is noted that under current electoral system and given the recent opinion polls, there is a chance that no party will hold the majority necessary to form a government, and coalitions are, generally speaking, out of the Greek political culture.
 
Still, the German Bank estimates that implications for banks should be marginal. It states that the Central Bank΄s current Governor still has 2.5 years before his term finishes, thus no major impact should be expected on current banking regulation or a tightening in capital requirements.

Even so, there may be changes in top management in those banks where the State holds a stake (Agricultural Bank -70 % and NBG - 15%).

“There would be doubts on what the new government΄s stance could be over those banks willing to repay back the hybrids issued to the Government in Q2 2009,” DB says while reiterating its “Buy ratings” on NBG, Alpha Bank.