NPL&REO News

Greek banks compete for participation in the state-backed Guarantee Fund

There is strong competition among banks for participation in the Guarantee Fund for the provision of state-subsidized liquidity to Greek enterprises, with 14 lenders expressing an interest in response to the invitation published by the Hellenic Development Bank.

These banks are the four systemic ones (Alpha, National, Eurobank and Piraeus), Attica, Optima, Procredit, six cooperative lenders (Epirus, Pancretan, Thessalia, Karditsa, Central Macedonia and Hania), as well as British credit corporation Ebury.

Such is the competition for the state-backed credit that the amount of loans for which banks have submitted offers added up to €8.5 bn, while the sum of the credit with the contribution of banks has been calculated at €7 bn. Sources say the four systemic lenders have submitted demands for loans totaling over €1.5 bn each, thereby laying claim to over €6 bn between them from the liquidity to be channeled to the economy with a strict timetable up to the end of the year.

According to the announcement by the Hellenic Development Bank, the amount of €7 bn to be handed out in the form of working capital to all companies regardless of whether they have been hurt by the pandemic will be distributed among banks based on each lender’s share in the financing of small, medium-sized and large corporations.

The increased competition among lenders is also indicative of the high interest among the enterprises themselves, which anticipate the activation of the fund to bring some cash into the economy and go some way toward tackling the general recession caused by the pandemic.

The Hellenic Development Bank has already announced that is examining the applications submitted for the determination and signing of contract terms with the commercial banks. The contracts will determine the conditions of the state guarantee to maximize the benefit and minimize the cost of funding for the corporations to get loans from the banks. All companies operating in Greece are eligible for the loans providing they were not deemed problematic before January 1, 2020, are considered solvent and serviced their debts up to end-December.

Original Story: Ekathimerini | Evgenia Tzortzi 
Photo: Site Alpha Bank
Edition: Prime Yield

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