Wednesday September 17, 2014 Search
Weather | Athens
28o C
21o C
News
Business
Comment
Life
Sports
Community
Survival Guide
Greek Edition
Banks shift to corporate credit

 Expansion built on household loans is a thing of the past, with enterprises taking precedence for lenders

By Yiannis Papadoyiannis

The economic crisis and the resulting credit crunch are leading to a major shift in the growth model pursued by banks, which for more than a decade relied on an aggressive household loan policy.

Bank officials agree that as the credit system follows the country’s economy out of the crisis, it will increasingly rely more on loans to corporations and much less to households, which in the previous decade spearheaded the credit expansion of the local banking system.

From December 2009 to June 2014 the balance of loans to households has declined by about 20 billion euros or 16.6 percent, to 99.4 billion euros. Mortgages shrank from 80.2 billion euros in December 2009 to 70.2 billion last month, while the balance of consumer loans dropped from 36.02 billion euros in end-2009 to 27.7 billion at the end of last month.

An notable decline has also been recorded in credit cards, associated to the slump in private consumption. The credit card balance came to 5.66 billion euros in end-June, dropping 40 percent from the 9.54 billion in December 2009.

In the previous decade, however, household loans soared from 16.8 billion euros in December 2000 to 119.28 billion in December 2009. Banks had taken such an aggressive approach to home loans that they were granting mortgages worth over 1 billion euros every month. This supported the profits and the strong growth of banks inside and outside Greece in that decade.

The time for this model is now over, bank officials stress. Lenders will instead rely on corporate credit, keeping loans to households at low levels. “Loans to healthy enterprises – small, medium-sized or big – will feed the new cycle of credit expansion after the major deleveraging of the last five years. It will take much more time before we see substantial flow of credit for mortgages again,” said one bank official.

He added that the situation will remain difficult in consumer loans, as banks first have to deal with the European Central Bank stress tests and the huge stock of nonperforming loans.

ekathimerini.com , Wednesday Jul 30, 2014 (22:34)  
Sports events extend season of tourism
Gov’t to ask for subsidy return
Shipping sector concentrates but still expands despite crisis
First step toward transformation of Athenian Riviera
Pensions audit draws money, finds major fraud
A review of all the pensions being issued by the Greek state which started two years ago in a bid to weed out false claims has resulted in savings of 42.2 million euros, Alternate Finance Mi...
Athens dismisses Davutoglu´s invitation to tea on Cyprus
Turkey’s new Prime Minister Ahmet Davutoglu visited the occupied part of Cyprus on Tuesday and suggested that Greek Premier Antonis Samaras should join him there for peace talks but Athens d...
Inside News
SOCCER
Mitroglou seals Olympiakos´s 3-2 triumph over Atletico
Costas Mitroglou returned to scoring after 10 long months to seal a famous victory for Olympiakos in the Champions League as the Greek champion defeated visiting Atletico Madrid 3-2 on Tuesd...
SOCCER
Olympiakos, Atletico gear up for Champions League opener
A rousing 2-1 La Liga victory at Real Madrid on Saturday may suggest otherwise, but Atletico Madrid is still rebuilding after losing several key players in the close season, coach Diego Sime...
Inside Sports
FOCUS
Democracy´s many guises and challenges
The wilting Arab Spring, conflict in Ukraine, slaughter in Iraq and Syria, citizens not trusting their governments and Europeans losing their enthusiasm for the Union – most places you look ...
COMMENTARY
Lessons not learned
One year since the assassination of rapper Pavlos Fyssas by a member of Golden Dawn in Keratsini, southwestern Athens, we now know a lot more about the activity of the neo-Nazi party’s hit s...
Inside Comment
SPONSORED LINK: FinanzNachrichten.de
SPONSORED LINK: BestPrice.gr
 RECENT NEWS
1. Mitroglou seals Olympiakos´s 3-2 triumph over Atletico
2. Sports events extend season of tourism
3. Gov’t to ask for subsidy return
4. Shipping sector concentrates but still expands despite crisis
5. First step toward transformation of Athenian Riviera
6. Pensions audit draws money, finds major fraud
more news
Today
This Week
1. Greece at bottom of social justice scale among EU28
2. Lessons not learned
3. Golden Dawn candidate found guilty of inciting racist violence
4. Promises, promises
5. Thessaloniki woman arrested for cashing in dead aunt's pension
6. PM to inaugurate new surgery wing at Evangelismos Hospital
Today
This Week
1. Greece on standby
2. A Greek God
3. Avramopoulos appointed Commissioner for Migration and Home Affairs
4. Central Athens traffic restrictions back in force on Monday
5. Pavlos Fyssas murder trial expected to start before the end of the year
6. EU bank tests may miss trillion dollar risk, study finds
   Find us ...
  ... on
Twitter
     ... on Facebook   
About us  |  Subscriptions  |  Advertising  |  Contact us  |  Athens Plus  |  RSS  |   
Copyright © 2014, H KAΘHMEPINH All Rights Reserved.