Greek banks gained the most among European equities amid speculation the lenders will profit from the sale of some of the European Financial Stability Facility bonds they own.
The gains pushed the benchmark ASE Index higher for the first time this week after a European Central Bank spokesman said the EFSF bonds used to recapitalize Greek banks under the country’s bailout program are eligible for purchase under its quantitative-easing plan. Greek banks were previously prohibited from selling the EFSF notes and were required to value them at par, or 100 percent of face value.
The nation’s lenders have already begun sales of EFSF notes to Bank of Greece, according to three people familiar with the matter, who asked not to be named as the information isn’t public. Greek bonds also rose on Friday, with the 10-year yield set for its biggest drop in more than a month.
“This is good because Greek banks need to take big provisions for non-performing loans and an extra source of profitability could be very helpful for the overall results for the year,” said Nikos Kyriazis, an equity sales trader at NBG Securities.
The FTSE/Athex Banks Index climbed 16 percent at 2:25 p.m local time in Athens, the most since February. Eurobank Egrasias SA jumped 20 percent, while Alpha Bank AE rose 13 percent.
The ASE index added 3.9 percent, and Greece’s 10-year bond yield fell 21 basis points to 9.13 percent.