Athens Digest 29.03.2018

• PM promises growth, MinFin hopes for lower surpluses

• Piraeus Bank turned profitable, improving its ratio of non-performing loans

• Provisions for bad debt spell losses for National Bank of Greece

• Commerce organisation backs Cypriot model for foreclosures

• Aegean to spend $5 billion on Airbus order amid positive tourism forecast

# Prime Minister Tsipras told an audience in Thessaloniki last night that success in meeting fiscal targets would allow the country to make a clean exit from the bailout and deliver on growth promises. “The road is open: 2018 will be better than 2017. And 2019 will be better than 2018. That’s in terms of growth, reducing unemployment and regaining credibility for the Greek economy” he said, referring to the country’s growth strategy due to be presented to creditors next month. Outside the hotel hosting the PM, police clashed with protesters who rocked a riot police bus.

# In front of a SYRIZA committee, Euclid Tsakalotos, the finance minister, said the long-term goal of high primary surpluses (at 3.5 percent) was attainable thanks to improved tax collection which will allow providing some more social benefits. The EU’s rebooted Franco-German alliance, under Chancellor Angela Merkel and President Emmanuel Macron was likely to ease austerity, he said. In this framework, discussion about the primary surpluses may return on the table.

# Piraeus Bank announced Full Year 2017 results yesterday. Greece’s largest lender turned profitable, improving its ratio of non-performing loans. Piraeus Bank reported a net profit from continued operations of 12 million euros. NPEs reduced by €3.0bn, NPLs by €3.7bn year-on-year. The group said bad debt provisions rose to 1.18 billion euros from 312 million in the third quarter. The NPE and NPL stock in Dec.17 was at the lowest level since the Sep.15 peak, down by €3.0bn and €3.7bn yoy to €32.9bn and €20.7bn respectively, outperforming the targets set for year-end 2017, for both NPE and NPL. In Q4.17, domestic NPL formation declined by -€0.7bn (122bps over gross loans). Christos Megalou, CEO of Piraeus Bank stated: “In 2017, Piraeus Bank took significant strides forward in using its strong capital base to accelerate its balance sheet clean-up. The combination of increased provisioning and IFRS9 First Time Adoption (FTA) significantly increased NPE & NPL cash coverage, overhauls balance sheet de-risking, and cost of risk de-escalation going forward”.

# The National Bank of Greece ended 2017 post-tax losses of EUR163 million with numbers worsening in the fourth quarter under pressure from provisions for bad debt. NPEs are lowered by EUR4.2 billion, exceeding the FY.17 target by EUR0.83 billion. Capital adequacy increased to 16.7% on a CRD IV FL basis. “National Bank of Greece has managed to maintain a solid pace of NPE reduction throughout the last two years, reducing its stock by about EUR4.2 billion since the end of 2015, covering half the distance to the 2019 target,” CEO Leonidas Fragiadakis said.

# Leading commerce and legal organisations say they want the government to improve foreclosure laws to protect mortgage-holders facing eviction and separate them from so-called strategic defaulters. The Greek Economic Chamber and bar associations urged the government to copy Cypriot legislation which gives distressed homeowners an opportunity to match price raised by the auction of their property before the sale is finalized.

# Aegean Airlines announced it’s planning to spend up to $5 billion to renew and expand its fleet with 42 new generation Airbus passenger jets. The major order of the A320neo and A321neo aircraft was made as Greece is expecting to break successive tourism records over the next few years. Elena Kountoura, the tourism minister, says this year’s holiday visits could be 1.5 million higher than the 27 million people who travelled to Greece in 2017. Aegean, which also runs Olympic Air, stuck with its all-Airbus fleet of jets but also operates turboprop aircraft.

On our Radar: Racist violence back on the rise
Attacks against migrants, gays and activists have seen a resurgence in 2017 according to a report by the Racist Violence Recording Network, formed by leading human rights groups and charities. Its annual report said attacks had risen in number compared to 2016 and also appeared to be increasingly organised, including assaults by gangs on motorcycles. The report was released following a government warning that activity by violent far right groups _ linked to neo Nazi ideology _ was on the increase. Earlier this month, alleged members of the extreme-right group Combat 18 Hellas were arrested on charges of membership of a criminal organization. They are under investigation for more than 30 attacks against migrant-run stores, squats, and Jewish sites.