Greek banks are beginning the securitization of their bad loans planned for 2020 amid increased uncertainty related to the duration of the economic crisis and its impact on nonperforming credit portfolios.
The factors that will affect the securitizations are the size of the economic recession and the recovery estimates, the effect on property prices and the new institutional framework the government is processing for the subsidizing of main residence mortgages, combined with the new bankruptcy code to apply from 2021.
These factors will have a direct impact on the prices based on which the loans will be sold, taking into account the capacity of households and businesses to meet their loan obligations in 2021. A key condition is avoiding a new lockdown so that the economy can regain its footing next year.
The loans to be sold by systemic banks Alpha, Piraeus and National will add up to 24 billion euros, starting with the Galaxy project by Alpha Bank, which expects non-binding offers by the end of the month. The recent sale of the Cairo portfolio by Eurobank for €7.5 billion is a good sign.