Bad-loan sales and securitizations, and the repayment of dues by companies and households, have put a brake on net credit expansion and led to the shrinking of the four systemic banks’ loan portfolios, according to an analysis on third-quarter results by Euroxx stockbrokers.
The data showed that the combined loan portfolio of Alpha, Eurobank, National and Piraeus has diminished by 7.2 billion, despite new loan issues of €5.4 billion in the third quarter of the year.
The total credit portfolio of the four main lenders after the declassification of the loans to be securitized and the repayments added up to €128.6 billion at end-September. Alpha accounted for €34 billion, Eurobank for €29.2 billion, National for €30.9 billion and Piraeus for €34.4 billion.
On a group level (including subsidiaries, etc) the loan portfolio amounted to €146.8 billion, while after the provisions of €11.5 that the four banks have made to compensate for any losses from bad loans, the net loan portfolio on a group level came to €135.2 billion at end-September, from €144.3 billion a year earlier.
The deleveraging of banks’ loan portfolios (the sale of nonperforming loans) has also affected revenues from interest. With the exception of National Bank, which saw an increase of 4.9%, there was an annual contraction of 1.4% for Piraeus, 2% for Eurobank and 5.6% for Alpha.
Crucially, the exit of those loans from banks’ portfolios renders the latter healthier, allowing for new issues and reducing the need for more provisions. That trend is expected to be consolidated over the following quarters.
Unlike takings from interest, which have not yet become stable, commissions are evolving into a significant source of revenue for banks: In the first nine months of the year they rose between 11.5% and 20.5% annually, depending on the lender, which is a clear indication of the shift to online payments and of the economic recovery.
For Alpha, takings from commissions increased 19.1% to €299.5 million, Eurobank saw 18.4% growth to €325.9 million (including revenues from its realty portfolio management), National posted an 11.2% rise to €208.9 million and Piraeus enjoyed a 20.5% jump to €278.8 million.