Smaller loan installments for hardest hit

Smaller loan installments for hardest hit

As of January, Greek banks will implement reduced installment programs for well-serviced loans of those affected by the pandemic – businesses and households – that had been frozen since last April.

The announcement came on Tuesday as the nine-month banking “moratoriums” gradually begin to expire at the end of December.

In a bid to mitigate the serious side effects on economic activity resulting from the pandemic and to prevent these loans from turning into nonperforming ones (NPLs), banks plan to restore installments to pre-crisis levels over a period of one or two years.

Kathimerini understands that the National Bank of Greece (NBG) will offer a program, which provides for a reduced instalment of 50% for the whole of 2021.

Alpha Bank is aiming to reduce installments, depending on the capabilities of the debtor in question, for a period of two years.

Eurobank is also preparing a gradual return of installments to pre-crisis levels for 2021, increasing installments every quarter, while Piraeus Bank will implement programs depending on the financial situation of the debtor.

In total, these interventions concern 400,000 loans, totaling 25 billion euros.

Greece is among the top five countries that have given borrowers the largest moratoriums, according to the European Banking Authority, as the suspensions granted by the four systemic banks reach 15% of their total loans.

The strategy pursued by Greece’s four banks in managing these loans is not uniform, as they have established cooperation with different companies for this purpose.

Piraeus Bank has assigned the management to Intrum, Eurobank to doValue and Alpha Bank to Cepal, while NBG manages the NPLs of its customers internally.

The moratoriums had been given to consistent debtors – i.e. to those who had been servicing their loans normally until February 2020. Households were given a moratorium on their mortgage and consumer loan installments, while companies were only given an exemption from the obligation to pay interest.

The new measures will mainly concern this category of customers.

This, however, does not mean that those with pre-existing NPLs cannot settle them. However, the handling of this category of loans is not always a matter for the banks, since a significant chunk of them have been sold to funds.

 

Previous Next
Close
Test Caption
Test Description goes like this
Cookies Preferences
Choose Type of Cookies You Accept Using


These cookies are required for the website to run and cannot be switched off. Such cookie are only set in response to actions made by you such as language, currency, login session, privacy preferences. You can set your browser to block these cookies but our site may not work then.


These cookies allow us to measure visitors traffic and see traffic sources by collecting information in data sets. They also help us understand which products and actions are more popular than others.


These cookies are usually set by our marketing and advertising partners. They may be used by them to build a profile of your interest and later show you relevant ads. If you do not allow these cookies you will not experience targeted ads for your interests.