ATHENS, Dec 2 (Reuters) - Greek bank shares are likely to rebound strongly in 2017 after years of declines as the economy gets back on its feet and confidence returns, the head of the Hellenic Financial Stability Fund (HFSF) said on Wednesday.
“The very first signals will be seen from the end of next year, but I would expect the very strong change to be seen in 2017,” HFSF Chief Executive Aris Xenofos told reporters.
“2016 will hopefully be positive, but I think the main difference will be actually seen in 2017,” he said.
Controlled by the Greek government, the HFSF received money from the euro zone bailout fund ESM especially for bank recapitalisations and bought convertible bonds of Greek banks so as not to dilute their existing shareholder base.
Greek bank shares have been on a steady decline since 2010, hit by the sovereign debt crisis that was triggered by the disastrous state of Greek public finances.
The value of the Greek banks has slumped to about 1 billion euros ($1.1 billion) from 36 billion at the start of the crisis.
The banks have been recapitalised three times already and the last round completed this week with private and public money will allow them to withstand about 100 billion euros in non-performing loans.
The banks’ capital adequacy ratio is now about 17 percent and is expected to rise to above 20 percent in 2018, Xenofos said.
“That by itself explains why we feel confident that this recapitalisation is strong,” he said. ($1 = 0.9450 euros) (Reporting by Jan Strupczewski; editing by David Clarke)