Quarter of arranged loans turn bad
According to data from the union of loan and credit management companies (servicers), out of the total of 86 billion euros, the arrangements that have been made to date concern €25.5 billion and of these the arrangements that are being adhered to do not exceed €19 billion.
This is confirmed by Bank of Greece data, showing that the arrangements made concern 27.6% of the total portfolio under management that the servicers have undertaken on behalf of the funds that have purchased these loans, either through securitization or through direct sales portfolios. It should be noted that these loans represent 79% of loans under management by servicers, as another 21% concerns loans that are still on the banks’ balance sheets and have been assigned to servicers for management.
The problematic nature of the arrangements is largely attributed to the poor quality of these loans, which are 91% nonperforming. Of these, 73.9% are contracts that have been terminated and which are running out of time for a solution. A share of 18.7% concerns loans in arrears for over 90 days and 7.3% loans characterized as uncertain collection – i.e. involving a high probability of default.
