ATHENS: Greece has tabled an amendment to a bill allowing its banks to convert so-called deferred tax assets into tax credits and so strengthen their capital base ahead of European Central Bank stress tests in October.
The bill, expected to be voted on by Sep. 30, could save lenders around 2.5 billion euros ($3.2 billion) in core capital over 2015-16 and brings Greece into line with European peers Portugal, Italy and Spain, which have already adopted the measure.
Greece's four biggest lenders have suffered losses in recent years due to rising bad loans and their participation in a debt restructuring programme (PSI) aimed at relieving Greece's debt burden.
"The market was expecting the tabling of the bill. It's good news because it will help the banks' capital adequacy ratios ahead of the stress tests," said Natasa Roumantzi, head analyst at Piraeus Securities.
National Bank, Piraeus Bank and Alpha Bank are majority-owned by the HFSF bank rescue fund. Together with Eurobank, they control about 90 percent of the industry and have already been recapitalised twice after two stress tests by the Greek central bank.
The lenders were bailed out by the European Union and International Monetary Fund, which set aside 50 billion euros in bank rescue fund the HFSF to clean up the sector after its battering in the country's sovereign debt crisis.
Euroxx Securities estimated the banks' core capital could benefit by around 2.5 billion euros for 2015-16.
The Athens bourse's banking index was up 0.84 percent at 1033 GMT.
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