Capital Calls: Greek bank relaunch relies on same old fuel source

Reuters Reuters

(The author is a Reuters Breakingviews columnist. The opinions expressed are their own.)

LONDON (Reuters Breakingviews) - Concise insights on global finance.


GALAXY BRAIN. Alpha Bank Chief Executive Vassilios Psaltis on Monday announced plans to raise 800 million euros of “growth capital” as part of his strategy to reach a 10% return on tangible equity (ROTE) by 2024. Investors nudged the lender’s shares up by one-tenth, reversing some of Friday’s losses, but they’re still sceptical. If Psaltis’s targets were achievable, Alpha’s market value in 2024 should roughly match its projected 6.7 billion euro tangible book value. In today’s money, using a 10% discount rate, that’s 5 billion euros. Yet the lender is worth less than a third of that sum.

One explanation is that Psaltis’s revenue targets look punchy. They assume that cash from the European Union recovery fund effectively doubles the growth in Greek business lending by 2024. Another reason for caution is that the biggest share of Alpha’s hoped-for ROTE uplift comes from a continued bad-debt cleanup. In other words, Psaltis’s “Project Tomorrow” plan has an eerie ring of yesterday. (By Liam Proud)

On Twitter

Earlier in Capital Calls:

JD plays it safe with logistics spinoff

Procore market debut

Bitcoin salaries

UK’s retail surge papers over hidden nasties

German tycoon’s heirs bail on Lufthansa bet

(SIGN UP FOR BREAKINGVIEWS EMAIL ALERTS:; | Editing by Peter Thal Larsen and Oliver Taslic)

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Latest Markets Videos


Reuters, the news and media division of Thomson Reuters, is the world’s largest international multimedia news provider reaching more than one billion people every day. Reuters provides trusted business, financial, national, and international news to professionals via Thomson Reuters desktops, the world's media organizations, and directly to consumers at and via Reuters TV.

Learn More