Banks and companies that manage bad loans are concerned in view of the upcoming difficult winter in terms of energy rates, the new increase in interest rates that the ECB is expected to announce, and the increased obligations this period creates for households at the start of the school year.
Officials at banks and servicers are considering the possibility of measures to help borrowers, and despite the fact that so far the course of loan servicing is progressing smoothly, they all recognize the expediency of having an arsenal of measures if conditions worsen.
According to sources, emphasis should be placed on borrowers who are consistent with their repayments, with the aim of keeping alive banks’ serviced portfolios, and especially on those who have settled their debts and continue to comply with regulations. The aim is to prevent these loans from turning nonperforming and protect the arrangements made to date.
Competent banking sources insist that for now there are no thoughts on horizontal measures and that any arrangements be made at the request of debtors on the basis of individualized solutions, such as reducing their loan installments for a few months to be able to meet their obligations before being forced to default on a payment.
Banking sources explain that any intervention in performing portfolios in the form of a horizontal facility will have a serious impact on the provisions that the banks will have to take. This is because even if a loan is rearranged – that is, without turning bad – it goes into another category that requires increased provisions, which directly hits the banks’ profitability and undermines the effort to distribute dividends.
The test run for decisions in the near future will be the loans included so far in the state-subsidized Gefyra 1 and 2 programs, for loans which have started to expire and whose behavior will judge the endurance of households and businesses in continuing to service their debts.