ATE reveals hedge fund exposure

ATE Bank revealed that it has invested up to EUR 800 mln in some relatively higher risk instruments in an effort to raise total portfolio return. These are multi-structure instruments, a large part of which are capital protected. They are part of the trading portfolio. Any re-valuation gains or losses affect equity indirectly through the P&L and the regulatory capital with a 100% risk weight, similar to equity investments. As of end-June, ATEbank reported a EUR 6.9 mln revaluation loss on the trading portfolio (part of which was due to the structured products) and a capital adequacy ratio of 11.58% (which incorporates the trading portfolio). According to ATEbank, a more recent portfolio revaluation was yielding a profit. Other banks (i.e. Postal Savings) have similar holdings.

Atebank said the non-protected investments are placed with the likes of EFG Eurobank, Citibank, HYPO and JP Morgan, which according to the Bank have delivered a satisfactory return.