Greek bank 94% profit drop!

Piraeus Bank, Greece’s forth largest lender, said today its profits for the first 9 months of this year were down 94%!

Earlier this year Piraeus was one of Greece’s poster boys for the strength of their recovery and the certainty of growth – so much so that Piraeus was bidding to take over the government’s stake in two  even more ailing Banks, ATE Bank and Hellenic Postbank.  Needless to say that offer has been withdrawn.

The 94% collapse in profits is due, they said, to increasing losses on bad debts.  Those would be the bad debts that Greece had sorted out and the European Bail out had double sorted out.  Look boys and girls 15% is an increase.  60 % is a rude shock. 94% is slamming into a concrete block.

But it’s just Greece right?  Like Ireland is ‘just’ Ireland.

Let’s look at who Piraeus has close links to – it major correspondents.  They are, from their own paperwork:

Germany – Deutsche Bank,  Commerzbank  plus two Landesbanks – the Hessen  and the Beyerische. The latter should make you wince.

France – Societe General

Ireland – Bank of Ireland

GB – RBS, Nat. West, HSBC

Italy – Unicredit ( actually it is through Unicredit Austria but therein lies a sordid tale. Unicredit Austria also appears again on the list via its ZAO Unicredit  Bank in Russia – you  join the dots)

USA  Bank of New York, JP Morgan Chase.

There are others from other countries-  Danske Svensca, Sumitomo.

So will the problem at Piraeus spread or be contained?  I leave you to decide.  Also worth a brain cell is the question m- is it likely that Piraeus is the only Greek bank whose profits are dying?

And if you think the answer to that is ‘no’ then what of the epic mythology of Greek growth?

Greece is sinking. It’s banks are bleeding like naked fat men rolling in rusty razor blades, its fiction of growth is in tatters and its austerity measures are not going to hold.  While at the other periphery Ireland is similar trouble.  And between them sit THE SAME German and French, Italian and Austrian Banks who are exposed to BOTH of them

Oh yeah sure it’s all contained!

12 thoughts on “Greek bank 94% profit drop!”

  1. Dont worry David the second instalment of "money" is delivered (to the banks) in January. No doubt adding to the commodity bubble being fuelled by QE and this tripe.

    All is well in Greece, the EU and IMF said so the other day, and just in case there is always the provision in the Lisbon "treaty" for the reintroduction of the death penalty.

    (c) in action lawfully taken for the purpose of quelling a riot or insurrection.’

    a)b) Article 2(2) of the ECHR:

  2. I am afraid Golem is right in his analysis that Ireland is being used as conduit for Europe to bail out its own banks (sphincter-nomics)

    This is like a plot from a bad Bond movie; an evil cabal of super rich bankers work out how to suck all the wealth out of a few small countries without even directly killing people. It is outrageous. You can almost see them in their control room full of blinking monitors, one of which shows Ireland sinking into the sea, "Good work Number 2! Now lets turn up the heat on Portugal."

    Krugman is right http://www.nytimes.com/2010/11/26/opinion/26krugman.html?_r=1&hp – it would take a brilliant satirist to really wake people up to it. But, as more of this comes out, there will be people on the streets. It will get very ugly. The bankers have to be taken down.

    As Chomsky cogently put it in 2008. "It reveals, once again, the profoundly undemocratic character of state capitalist institutions, designed in large measure to socialise cost and risk and privatize profit, without a public voice." http://www.chomsky.info/articles/20080919.htm

    AIB and BOI were making obscene profits through the 1990s and 2000s, none of which they offered to share with me. And now that they've blown it, we have to pay 24% to their creditors every time we buy a Mars bar for the next ten years!

    We need a Teddy Roosevelt in Ireland to take on the bankers; draft new legislation and put banks back where they belong – taking people's deposits and providing mortgages for people that have prospects of repaying them.

    There must be justice. If they are not held to account, they will continue in the same way.

  3. I like this blog, especially with lines like this: It's banks are bleeding like naked fat men rolling in rusty razor blades.

    Found you from a link by Richard Smith at Naked Capitalism. Someone linked you at HPC as well. Hope you get traffic.

  4. Golem XIV - Thoughts

    Stephen,

    I have hardly had a moment to look at the blog until now. Traffic?! It's a stampede. I don't know what to think. Except I think I should say thankyou to all those who linked to me.

    Nakedcapitalism, Housepricecrash and Zerohedge are the big ones today.

  5. Been reading your book David and I'll be amazed if a lot more people dont start to follow because you were very prescient back at the start of this rolling crisis and ever since you have nailed the reality behind the mirrors. I've been recommending you to everyone who I know who is interested at all in the situation and that is just about everyone sentient. Judging by the reaction to the Irish bailout today maybe the market dealers already are!

  6. Golem XIV - Thoughts

    wirplit

    Glad you like it. And I am in your debt for the recommendations.

    We have another review coming out in the UK Quaker publication, The Friend, this week I think. I'll post it when it comes out.

    Things are sliding back to the edge they all; thought they had escaped from nearly two years ago.

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