BUSINESS

Banks struggle to cooperate on major debtors

YIANNIS PAPADOYIANNIS

TAGS: Banking

The restructuring of the bad loans of major enterprises is moving at snail’s pace, as banks have not yet achieved a satisfactory level of cooperation. Poor communication and different priorities and targets for each bank are creating obstacles, delays and postponements.

Senior bank officials have admitted to Kathimerini that the pace of the process has not been satisfactory and the various procedures are being delayed.

For example, there are several cases where a generous haircut is needed for a sustainable solution to a large company’s debt. A bank that has 80 percent of a company’s loans requires a different approach to one where the lender holds 20 percent. The different collateral that each bank involved may possess could also raise obstacles.

Certain bank officials prefer to put off solutions instead of assuming the responsibility of resolving a problematic situation. There is also behind-the-scenes pressure and other actions by the stakeholders of problematic companies who are trying to postpone the difficult decisions, in the hopes of a miracle.

Such have been cases in the steel industry, the fish farming market and companies like Theocharakis, Botros, Haitoglou, Notos and so on.

This failure to reach solutions creates the risk of a full devaluation of those enterprises’ production capacity, eventually leading to the sale of their loans at a negligible price.

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