GIG Economic Bulletin – February 1, 2021

International investors signalled another vote of confidence in the Greek economy, as the country’s latest market foray with a 10-year bond attracted unparalleled offers while resulting in record-low yields.

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Greek state coffers have benefitted from a €3.5 billion increase after the latest 10-year bond issue, while new records have been set with respect to the size of the offer book (€29 billion) and the low cost of borrowing (0.8%). NBG becomes the fourth systemic bank to access the Hercules APS scheme for guarantees, while Greece’s wind energy sector saw a 14.4% increase in installed capacity in 2020 according to the Hellenic Wind Energy Association.


Retail turnover dropped by -7.9% Y-o-Y in November, after an increase of 4.3% in October, according to the Hellenic Statistical Authority (ELSTAT). The drop shows the impact of the latest lockdown on sales, with automotive fuel, furniture, and electrical and household equipment registering the biggest decreases, while supermarkets, pharmacies, and e-shops increased their turnover.

Credit growth to the private sector increased by 3.4% in December according to the Bank of Greece (BoG) – the highest level since March 2010 when it came to 3.5%.

BoG figures show bank deposits also rising by €4.45 billion in December, bringing the private sector balance to €163 billion. The inflows outpace last December’s figure of €3.65 billion and mark the highest reading since December 2012.

The third quarter of 2020 saw a 1.6% Y-o-Y rise in household disposable income, following a drop of -11.8% in Q2, according to ELSTAT.

Bond Issue

Offers on the new 10-year bond issue surpassed €29 billion. The issue raised €3.5 billion with the yield settling at 0.8%, setting new records for the size of the offer book and the low cost of borrowing. Finance Minister Christos Staikouras hailed the outcome as “yet another vote of confidence in Greece by international investors in the midst of the pandemic”.


Wind power investments worth a total €800 million are underway across Greece according to figures published by the Hellenic Wind Energy Association. The year 2020 witnessed a 14.4% increase in installed wind power capacity, with several new entries into the wind energy market from new and established energy companies including Motor Oil and Interphoton.


The logistics hub at Thriasio II is expected to be one of the beneficiaries of Greece’s post-COVID recovery plan. Plans for the site include the relocation of roughly 500 transport firms currently based in the west of Athens to the site around the cargo rail terminal at Thriasio. The government proposes to fund 30% of the cost through the EU Recovery & Resilience Fund, with the remaining 70% qualifying for state guarantees.


NBG has applied to the Hercules APS scheme for guarantees on the €3.31-billion senior tranche of its “Frontier” securitisation. The move makes it the fourth systemic bank to access the scheme, which has taken €27 billion worth of NPLs off banks’ balance sheets in the year since it was introduced.

Piraeus Bank is advancing with plans to boost its capital base by €1 billion by the summer, when the ECB is due to hold its stress test. The bank’s aim is to move towards full privatisation by reducing the HSFSF’s holding on behalf of the Greek state from its current level of 61.3%, and to clean the balance sheet of €21.9 billion of NPEs. Securitisations of €16 billion are in the pipeline.

Piraeus Bank offices in Athens. Copyright: Piraeus Bank

Alpha Bank plans to issue a Tier II bond of €500-600 million in Q1, prior to signing a deal with Davidson Kempner for the Galaxy securitisation. The bank is aiming for an interest rate of 5% on the issue.

The Greek authorities are pushing for a change in the law regarding banks’ deferred tax credit (DTC) arrangements, with the aim of allowing banks to book losses without incurring the obligation to issue shares to the state. The present arrangement was put in place to deal with losses incurred by the banks under the PSI restructuring in 2012. Greek banks’ regulatory capital includes €15.2 billion in DTCs, which represents 54.5% of the capital base.

Stock Market

The ASE general index closed the week at 749,46 points, registering weekly losses of -3.8%.

January’s performance was negative overall, with the index racking up losses of -7.36%, while the banking sector was down -14.6%. Greek equities proved vulnerable to global volatility, while the domestic outlook is affected by uncertainty over the direction of the pandemic and concern over the potential for stricter lockdowns.

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