The cash to flow into the country from the Next Generation EU fund will benefit Greek banks considerably through opportunities for direct and indirect lending, according to HSBC.
Out of the 57 billion euros to be leveraged with the utilization of Greece’s Recovery and Resilience Facility, some €18 billion could be financed through credit up to 2026. Greek banks will finance 70% of that credit, with the remaining 30% originating from international lenders and borrowing from the capital markets.
Consequently, the direct lending for the projects of the RRF will add 2.5 percentage points to the increase in the credit local bans issue.
Besides the opportunities for direct lending, the investments of the Greece 2.0 program will offer Greek banks additional profits through the increase of overall demand for loans.
Therefore, according to the British bank, the performing loans in Greek lenders’ portfolios will record a composite annual growth rate (CAGR) of 5% up to 2026. This translates into a considerable increase in the credit each one of the four systemic banks issue by some €6-7 billion per year in that period.