Greece’s request to the EU’s Directorate General for Competition, to be submitted in early October, foresees €1 billion of new guarantees under Hercules III to help banks reduce non-performing loans (NPLs).

The extension of the programme by €1 billion brings to €3 billion the amount of guarantees that the State has provided or intends to provide under Hercules III (from the €2 billion initially approved), while the total guarantees under the three successive extensions of Hercules are estimated to be close to €23 billion.

The Ministry of Economy and Finance has already started exploratory contacts with the relevant EU Directorate for the approval of the additional amount of guarantees.

DBRS estimates the amount of guarantees repaid so far at €2.2 billion out of a total of €19.2 billion guaranteed by the state for 17 securitisation transactions totalling €42.8 billion. Based on the same analysis, the outstanding balance of guarantees was €17 billion at the end of June and, as DBRS notes, “the decrease of around €2.2 billion, or 11.5%, shows that the majority of business plans still need to be worked out.

Original story: Kahtimerini | Author: Evgenia Tzortzi
Edition: Prime Yield

Greece is set to finalise its post-crisis bank privatisation efforts by early October with the sale of its remaining stake in the National Bank of Greece (NBG), sources told Reuters.

The upcoming sale will conclude a significant chapter for Greece’s banking sector, which was severely impacted during the debt crisis that nearly pushed the country out of the eurozone. This crisis led to stringent austerity measures imposed by international lenders in exchange for bailout funds.

Currently, the Hellenic Financial Stability Fund (HFSF), established in 2010 to stabilise Greece’s major banks and prevent wider financial contagion, holds an 18.4% stake in NBG. The plan is to sell between 10% and 13% of this stake, with the remainder being transferred to Greece’s sovereign wealth fund.

“The exact stake and timing for the sale will be decided next week,” one source revealed. The HFSF began reducing its holdings last year after injecting around 50 billion euros to support Greece’s top banks during the crisis.

The divestment of HFSF’s stakes in Eurobank, Alpha Bank, Piraeus Bank, and part of its NBG stake is viewed as a positive indicator of Greece’s economic recovery. However, many Greeks continue to experience the lingering effects of the crisis.

The sale of the NBG stake will be conducted through a book-building process and public offering, with JP Morgan advising on the transaction. If demand is strong, the government may opt to sell the full 13% stake.

Original Story: Greek City Times | Author: Reuters
Edition: Prime Yield

Consumer credit had been expanding at a 30% clip during the first half of the year, boosted by strong consumer demand and car sales, up 6.5% during the first six months of 2024.

Bank data show that disbursements of consumer loans nearly reached €650 million during the first half compared to €500 million during the same period in 2023.

Banks expect the figure to remain stable during the second half and reach €1.3 billion for the whole year, up from €1 billion in 2023.

Consumer loans were notoriously popular during the period, in the early and mid-2000s, that preceded the financial crisis. After tanking for several years, they once again reached the level of mortgages in 2023.

Of all consumer loans, 50% are simple loans concluded with banks, 30% concern buying a car, and the rest are concluded directly with retailers.

In the loans concluded with banks, the average loan is nearly €6,000, payable within four years. Car loans average €11,500, payable in 4.5 years, while loans from retailers are both much smaller and shorter-term, averaging €800 and payable in 1.5 years.

But the latter category is the fastest-growing because approval is immediate, provided – and this is the difference from 20 years ago – that the retailer accesses the borrower’s tax and credit history.

Besides buying a car, most consumer loans are used for renovations and buying household equipment. Many parents also borrow to cover the costs of their children’s studies, accommodation and spending, mostly abroad.

Original Story: Ekathimerini | Author: Evgenia Tzortzi
Edition: Prime Yield

Deposits showed a significant increase in the Greek banking system last month, while corporate credit also posted a notable expansion, according to the latest official figures.

Bank of Greece data showed a significant rise in new loans to businesses by €3.1 billion on a monthly basis in June, bringing credit expansion back to a double-digit upward rate of 10.3%.

The increase in disbursements from banks, combined with the strengthening of tourism revenues, also boosted business deposits by more than €3 billion in June compared to May, raising the total of deposits held by both businesses and households to €194.8 billion at the end of June.

Since the beginning of the year, household and corporate deposits have increased by €5.1 billion, most of which – close to €4 billion – comes from the increase in bank balances held by businesses: From €45 billion they jumped to €49 billion. Household savings have increased by €1.1 billion, as in end-June they reached €145.8 billion, from €144.7 billion in January.

That significant expansion is a result of the growth of the economy, fueled by the rise of tourism among other things. However, it is also due to a significant extent to the jump in new disbursements from banks to finance new investment projects through the Recovery Fund and other financing programs for businesses. 

New disbursements that are traditionally “rushed” at the end of each quarter due to the closure of banks’ balance sheets temporarily inflate the balances of deposits held by businesses in banks, until these funds are used up and spent on new investments. The acceleration of financing in the second quarter of the year was foreseen by the managements of the banks, as the disbursements were significantly short of the signed contracts of the Recovery Fund and are expected to accelerate further in the next two years in order to achieve the absorption of the resources.

Original Story: Ekathimerini | Author: Evgenia Tzortzi
Edition: Prime Yield

The latest data show that the non-performing loan (NPL) landscape in central, eastern and south-eastern Europe (CESEE) remains resilient, with stable volumes and ratios across most jurisdictions. As for Greece, the NPL market stayed buoyant, in contrast to the more subdued transaction flows in the CESEE region, says the latest NPL Monitor.

According to the study produced under the scope of the Vienna Initiative, the Greek market remained robust as a lot of market movements (some successful and some not) came in the form of smaller transactions in 2023, without hitting the headlines. And, although only €2.8 billion was sold directly by credit institutions, there was significant activity in secondary markets.

 Banks now approach portfolio sales more from a tactical perspective than as a crisis response. Consolidation dynamics in the credit servicers industry also helped to expand the secondary flow in 2023. 

Regulatory activity, rather than macroeconomic headwinds, has influenced deal activity in recent months. In Greece, the Hercules Asset Protection Scheme (HAPS) was renewed in December 2023 with a guarantee ceiling of €2 billion and expiry in 12 months, paving the way for more activity in the primary markets. Attica Bank and Pancreta Bank are expected to take advantage of the extension.

Original Story: EBRD (release) | Author: Nigina Mirbabaeva
Edition: Prime Yield

Bain Capital Special Situation has reached an agreement to acquire the the Andros Portfolio from Alpha Leasing, a subsidiary of Alpha Bank.

The Andros portfolio consists of Greek non-performing loans (NPL) and will, subject to regulatory consent, be acquired by Hellas Capital Leasing, a Greece leasing company wholly owned by funds managed or advised by Bain Capital.

This will be Bain Capital Special Situations’ seventh transaction involving European leasing portfolios, a sector in which it has acquired receivables with a c. €2.8 billion of gross book value.

Akin was the legal adviser of Bain Capital Special Situations in this agreement.

Original Story: Akin
Edition: Prime Yield

Attica Bank, Greece’s fifth largest lender, announced on Monday an initial agreement to merge with the smaller Pancretan Bank in an effort to clean up its balance sheet and create a new banking organisation.

The new entity will conduct later this year a capital boost that will be used to cover its capital needs and reduce its non-performing loan exposure.

“The two shareholders confirmed that an agreement in principle on a commonly accepted basis had been reached,” the bank said in a statement, without providing more details

The Greek banks bailout fund, the Hellenic Financial Stability Fund, owns 72.5% of Attica, with Pancretan holding 5%, Thrivest Holding 4.4% and pension funds about 10%.

Original Story: Reuters
Edition: Prime Yield

The government has threatened banks with state intervention unless they reduce the fees they charge clients for various banking activities.

Speaking at the annual general assembly of the Hellenic Banks Association, Minister of National Economy and Finance Kostis Hatzidakis pointed out that the non-settlement of the issue of bank commissions helps neither the banks, nor the government, nor the society.

He went on to call on Greek banks to adopt fairer systems based on the practices of other European banks or businesses with large client networks in Greece, so that a government legislative intervention is not needed.

The minister also announced a small quantitative expansion of the “Hercules” program of nonperforming loans’ securitization, with the aim of further reducing bad loans.

He further spoke of a small time extension for the inclusion of self-employed and freelance professionals in the IRIS system, who have been notified by the tax administration (AADE) about their delay, given that the period of implementation of the measure coincided with the interconnection of cash registers with POS.

Credit sector priorities

Hatzidakis presented five priorities for the banking sector. They are: Supporting the sector continuously and with all available competition tools (referring specifically to the fifth systemic bank to be created through the absorption of Pancreta by Attica Bank); the settlement of all outstanding issues in relation to the “Hercules” program; stronger support for the real economy and especially for small and medium enterprises; further strengthening of transparency and fairness in commissions; and rapid expansion of the IRIS direct payment system.

However, Hatzidakis underlined that the next step will be the extension of direct payments to all businesses and to the entire range of transactions, both in e-commerce and in stores, by March 2025.

“The government wants a robust banking system that acts as a driver of economic growth. However we also want a banking system with competition between banks. A banking system that will provide attractive returns to savers and liquidity to businesses and households,” noted the minister.

Original Story: Ekathimerini
Edition: Prime Yield