German Banks Top French With $23 Billion in Greek Debt, BIS Says

Bloomberg
June 5, 2011

German lenders were the biggest foreign owners of Greek government bonds with $22.7 billion in holdings last year, making them a likely negotiation partner in burden-sharing deals for the country, data from the Bank for International Settlement showed.

French banks, which led the group of Greek creditors with overall claims amounting to $56.7 billion, trailed their German peers on sovereign debt, of which they held $15 billion, according to the June report from the Basel, Switzerland-based BIS. Preliminary data was released in April.

The overall figure for French banks was inflated by $39.6 billion in lending to companies and households, mainly because of Credit Agricole SA (ACA)’s Greek unit, Emporiki Bank SA. (TEMP) German lenders have no major bank units in the country.

At the end of 2010, Greek government bonds held by lenders in countries reporting to the BIS totaled $54.2 billion, of which 96 percent was owned by European banks. Germany and France, which accounted for 69 percent, may be asked to weigh in when the European Union goes ahead with plans to win Greece creditors to roll over their debt in a “Vienna-style” program.

“We have long argued that the holdings of Greek government debt are fairly concentrated,” Barclays Capital analysts, led by Sherif Hamid, wrote in a note June 3. “The top 30 holders likely account for roughly two-thirds of the debt, and this should make it easier to negotiate and achieve a decent success rate on any restructuring.”

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