July 15, 2013 / 12:11 PM / 4 years ago

UPDATE 1-Greece's Piraeus expects to pass year-end stress tests

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ATHENS, July 15 (Reuters) - Greece’s Piraeus Bank expects to pass stress tests due by the end of the year to satisfy the country’s international lenders of the adequacy of capital buffers.

After plugging a 7.3 billion euro ($9.5 billion) capital hole last month, Piraeus has a core Tier 1 capital adequacy ratio of 14.5 percent, the highest among the country’s four top banks, Chief Executive Stavros Lekkakos said.

“I‘m certain the stress test will show Piraeus will not need fresh capital,” Chairman Michalis Sallas told reporters after the bank’s annual shareholder meeting.

Sallas and the chiefs of Greece’s three other leading banks met Prime Minister Antonis Samaras and Finance Minister Yannis Stournaras on Monday to discuss ways to pump funds into the economy to support recovery.

Athens expects the economy to start recovering next year after a six-year slump which has driven unemployment to nearly 27 percent as the austerity measures demanded by the country’s foreign lenders has pummeled consumption and investment.

“Liquidity is needed,” Sallas said, adding that the bank would focus on lending to sectors involved in primary production and import replacement rather than consumer credit, where demand is down sharply because of the recession.

Greece’s top four banks - Piraeus, Alpha, National and Eurobank - completed a 27.5 billion euro recapitalisation last month to restore their solvency after a hit from writedowns on government debt and bad loans.

Their aim now is to regain access to international markets to boost lending to help the economy out of its deep downturn.

Sallas also told shareholders that the bank may turn its Geniki unit, which was purchased from Societe Generale last year, into a bank specialising in asset management, loan restructuring and advisory banking. ($1 = 0.7661 euros)

Reporting by George Georgiopoulos; Editing by David Goodman

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