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ECB fines Piraeus Bank €5.2M for breaching own funds provisions

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ECB fines Piraeus Bank €5.2M for breaching own funds provisions

The European Central Bank imposed a fine of roughly €5.2 million on Piraeus Bank SA for violating own funds provisions between 2015 and 2017.

The regulator said the Greek lender, under the oversight its former management team, released the cash collateral of nonperforming borrowers to buy its own shares. It then misreported the collateral as common equity Tier 1 capital for six straight quarters.

Regulators uncovered the violations when the bank was audited following a management reshuffle that saw nearly 60 senior and middle managers leave the lender in two months, the Financial Times reported.

Piraeus Bank said in a Sept. 23 statement that the fine, which refers to "a legacy issue of 2015, arising out of a regulatory inspection for breach of own funds prudential requirements," has no further impact on its financials since it had already taken the issue and the penalty into consideration in previous financial statements.

The lender noted that a major restructuring of its management and corporate governance structure has since been undertaken, including a thorough review and reinforcement of its internal control framework, policies and processes.