OOE
- 30 Apr 2023
- economy
Greek banks are resilient and armored, however the problem of bad loans, which is likely to worsen due to the increase in interest rates, will require at least another five years in order to be settled definitively.
This was the main conclusion of the bankers who participated in a panel of the Economic Chamber.
Martin Bijsterbosch, head of the ECB's Greece team, acknowledged that banks are currently under pressure because of the turmoil in the US and Switzerland with Credit Suisse. However, he assured that the Greek banking system, although there is a need to strengthen it, is in a very good condition, and there is no concern. He added that the ECB has the necessary tools in order to deal with any liquidity problems.
Referring to the Greek economy, he emphasized that it has strong points, at the same time underlining a significant reduction of bad loans below 10%, however a further reduction is required.
He emphasized that it is necessary:
1 To strengthen the resilience of banks to provide financing. “Profitability has improved, stable sources of income. Investors are here, banks are becoming more attractive," he said
To progress satisfactorily with the allocation of funding from the European Funds.
To create institutions that will support lending for investment in production.
Vassilis Koutentakis, head of the Piraeus Retail Banking Bank, pointed out, among other things, that the banking system faced problems in the past. He said that last year credit expansion reached 6.5 billion. euros while deposits increased by 8.5 billion. euro.
"We wanted the credit expansion to exceed 6.5 billion euros this year," he said. He also pointed out that it is necessary, alongside the digital transformation of the Greek economy, to advance that of the banks, in order to facilitate the customer's contact with the bank.
Theodoros Kalantonis, president of doValue Greece, for his part, argued that bad loans, despite their reduction, are a burden on the economy and that development planning. He predicted that for the definitive treatment of the problem, as there are still 90 billion. euros, it will take at least another five years. Therefore, as he characteristically stated, "populisms and easy positions do not fit".
To date Servicers have settled approximately €35 billion in red loans and approximately €10 billion have returned as green to the banking system.
He expressed his concern about the consequences that the increase in interest rates will have on borrowers, households and businesses. Already in the last 2-3 months, as he said, alarming signs have appeared, mainly in mortgages and loans to Small and Medium Enterprises, however he described the situation as under control. In order to illustrate the problem, he cited the example of a debt-servicing company of EUR 40 million with 200 employees and an EBITDA of EUR 2 million in 2021.
The annual cost of servicing its loans before the increase in interest rates was 800,000 euros, while today it has reached 1.6 million euros and by the end of 2024 it will have shot up to 2 million euros, which are its profits.
Eleni Vrettou, managing director of Attica Bank, referred mainly to her houses, arguing that the consolidation and strengthening plan of Attica is already underway, in order to turn it from a "big patient that is currently at the center of the banking system"
She argued that the Bank of AtticaATT -3.78% can play an essential role in financing the Greek economy as a large number of businesses are currently excluded from the banking system.
Referring to the planned increase in the share capital, he stated that Thrinvest of Baku - Kaimenakis - Exarchos is willing to invest significant funds in the Bank of Attica, as long as the consolidation of the Bank is not completed as he said, we will proceed with the merger (s.s. with the Bank of Greece ) in order to create the 5th pillar of the Greek Banking System.
Finally, Ilias Xirouhakis, managing director of the Financial Stability Fund, referred to the Fund's contribution of approximately 46 billion euros for the consolidation of the Greek systemic banks and also of the Bank of Attica, in which it holds approximately 70% of the share capital.
He mentioned without "opening his papers further" that the HFSF has determined its disinvestment policy from the banks as early as the end of 2022.
As he stated, the goal is to return the shares held by the HFSF in the banks to private individuals, assuring that there has been interest in this from private investors. ORFANIDIS IOANNIS
