Monday December 22, 2014 Search
Weather | Athens
13o C
8o 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)  
Alpha Bank Cyprus to absorb local Emporiki
Greece’s 10-year bond yield drops 13 bps to 8.30 pct
Traders stay focused on Tuesday’s vote
Spanish bond gains push yield to record low as Greek debt rises
Police collar fraudsters who conned money out of jobless
Police in Thessaloniki, northern Greece, have arrested four suspects charged with defrauding unemployed people out of a combined total of more than 30,000 euros. Among the suspects is a 42-y...
Bill aims to close down landfills, curb EU fines
Draft legislation aimed at minimizing European Union fines for noncompliance with waste management directives, which was submitted in Parliament Monday, foresees the closure of all illegal l...
Inside News
SOCCER
Special day for Abidal, lucky one for PAOK
PAOK scraped through its Livadia challenge beating Levadiakos to remain on top of the Super League for Christmas, one point ahead of Olympiakos that enjoyed a great game at Kalloni and offer...
BASKETBALL
Explosive Barca unfazed by Panathinaikos, bomb scare
Panathinaikos lost 80-67 at home to Barcelona on Friday in a rather meaningless game at the end of the first group stage of the Euroleague, but the encounter will be remembered for the bomb ...
Inside Sports
INTERVIEW
Klaus Regling stresses debt sustainability through commitment to reforms
BRUSSELS – The man who is responsible for the loans to Greece as managing director of the European Stability Mechanism (ESM/EFSF), Klaus Regling, is the only high-ranking European official w...
INTERVIEW
‘Crisis of confidence will come back again and again,’ says Thomas Piketty
He’s treated like a rock star wherever he goes to lecture. His book “Capital in the 21st Century,” a study on income and wealth inequality from the 18th century to the present, recently tran...
Inside Comment
SPONSORED LINK: FinanzNachrichten.de
SPONSORED LINK: BestPrice.gr
 RECENT NEWS
1. Police collar fraudsters who conned money out of jobless
2. Bill aims to close down landfills, curb EU fines
3. Alpha Bank Cyprus to absorb local Emporiki
4. Greece’s 10-year bond yield drops 13 bps to 8.30 pct
5. Traders stay focused on Tuesday’s vote
6. Inspector finds serious problems in doctors´ fund management
more news
Today
This Week
1. Prosecutor gathers depositions in Independent Greeks 'bribe' probe
2. Euro shaky on ECB and Greece, dollar keeps edge
3. Government accuses SYRIZA and Independent Greeks of 'clear alliance'
4. Greek parliament vote in balance after Samaras election offer
5. Draghi starts squaring QE circle in month of persuasion for ECB
6. Klaus Regling stresses debt sustainability through commitment to reforms
Today
This Week
1. Samaras summons bond vigilantes with euro exit talk
2. High stakes
3. Europe's drama in Greece needs final act to avoid tragedy
4. A friendly yet firm message from Pierre Moscovici
5. On the edge but not gutless
6. Ship with 200 migrants off Pylos towed to Italy after passengers refuse to stop in Greece
   Find us ...
  ... on
Twitter
     ... on Facebook   
About us  |  Subscriptions  |  Advertising  |  Contact us  |  Athens Plus  |  RSS  |   
Copyright © 2014, H KAΘHMEPINH All Rights Reserved.