Greek banks likely to need fresh capital

With an average fully loaded CET1 ratio of 10.7% as of Q1 15, the reported regulatory capital position appears adequate, although the Q2 15 ratio might have deteriorated further to reflect losses on GGB holdings and P&L losses. 

But even if Greece averts an EMU exit and its banks continue to receive liquidity through the ELA, the country's entry into a new programme will still likely require banks to raise capital in order to bolster solvency and cushion them against asset quality deterioration associated with a weakened economy. 

"The average non-performing exposure ratio (NPE) is 41%, already very high but now also at risk of continually increasing over the coming quarters. Ultimately, however, a strengthened capital system is needed to help restore confidence and therefore deposits", says Barclays. 

A fresh balance sheet assessment and stress test reflecting the revised macro-economic climate cannot be ruled out as a pre-requisite of a new programme and could be the catalyst for identifying fresh capital needs.