Bad-loan sales help banks in several ways
Revenues of 2 billion euros have reached the coffers of Greece’s four systemic banks from transfers of nonperforming exposure portfolios to date, but after using these sales as the main instrument for reducing their bad-loan stock in the last couple of years, they are now focusing on securitizing portfolios.
The banks’ plans are expected to be supported by the Finance Ministry’s Hercules plan, which opens the way to securitizations of up to 30 billion euros on state collateral that could reach up to 9 billion.
Kathimerini data show that Alpha, National, Piraeus and Eurobank have so far sold or securitized loans with a combined nominal value of 14.5 billion euros, while their value including interest shoots up to 28.7 billion. These transfers have so far fetched a total of 2 billion euros, but the price of each transaction differs according to the type of the portfolio and whether the loans are secured or not.
The main benefit from those transactions (some of which forced banks to take losses) is that they help to streamline the lenders’ financial reports, while certain transactions have had a positive capital impact, releasing funds.
