Loan adjustments: Greek Fin. Min meets with servicers

Loan arrangements were yesterday at the center of the meeting of Finance Minister Christos Staikouras with servicers. According to information, the two sides noted the progress that has been made, while they discussed their forecasts for the rest of 2023. The meeting was attended by the heads of the companies as well as Mr. Spyros Pantelias from the Bank of Greece. The meeting appears to have been held in a good mood with the minister asking for the continuation of loan arrangements. Management company representatives have reportedly agreed to “pick up” the pace of regulation, while they have been asked to present their plans for the current year.

According to information, the Minister of Finance requested that even more moves be made towards the regulation of “red” loans both bilaterally and through the Extrajudicial Mechanism.

So the servicers will come back with specific proposals in the next few days. It is recalled that according to data from the Bank of Greece, servicers have taken over the management of 92.7 billion euros of non-performing loans.

The information about the Extrajudicial adjustment

At the same time, the data shows that the 20 companies – members of the Association of Loan and Credit Receivables Management Companies (EEDADP) have proceeded from 2020 until today to loan arrangements of all categories, totaling more than 17 billion euros, of which eight billion euros outside bank portfolios and more than 8.5 billion euros from the banks that have now been converted from non-performing to informed assets.

As for the Extrajudicial Mechanism, the most recent figures show that the arrangements “rose” to 2,705 – up from just 416 in July 2022 – amounting to 822 million euros, with the average debt standing at 291,000 euros. The approval rate based on total debt for financial institutions (servicers and banks) increased to 69% compared to 65% the previous month, with acceptance of the arrangements reaching 74% in multilaterals compared to 58% in November and 67% in bilaterals (Domestic Revenue – social security/EFKA) from 69%.

Who it concerns

Also, 74% of the debts, amounting to 18.7 billion euros, concern natural persons, with 79% of the debts being to financial institutions (banks and servicers), while the average duration for debts to the State is 18 years and to financial institutions in 15 years.

33% of the debts were settled with a duration of more than 20 years. The average duration for housing debts is 23 years and for business debts 12 years, while the average write-off rate for debts to the State is 20.4% and to financial institutions at 30.8%.

Finally, 39% (320 million euros) of the arrangements have received a deletion rate greater than 30%. In mortgage debt, the write-off rate is 21.9%, in business debt at 39.1% and in consumer debt at 31.7%.