Collateral

The managing officers of real estate investment companies as well as foreign funds exploring the Greek market in search of opportunities have their eyes fixed on the real estate assets in the portfolios of secured nonperforming loans that were sold last year.

Greece is planning to submit a bill to parliament on Friday to protect borrowers from home foreclosures, a government official said on Wednesday, though it is yet to secure the agreement of its lenders on its terms.

State Minister Alekos Flambouraris, representatives of the Hellenic Bank Association, and the CEO's of Greece's four systemic banks finalised details of the new framework for the protection of debtors' primary residence from foreclosure.

Representative of Greece's four systemic banks - Alpha, Eurobank, Piraeus, and National Bank of Greece - are holding their second meeting in a week this evening with the government's economic team at the PM's office.

The focus of the meeting will be a new law establishing the framework for the protection of debtors' primary homes from foreclosure.

A report by the Bank of Greece on the decline of nonperforming exposures (NPEs) on Thursday served as a warning for local lenders, because it shows that in the first half of the year Greek banks missed out on their commitment on bad loan reduction.

Banks are expected to sell more unserviced corporate loans in 2018 and 2019, in their effort to achieve nonperforming loan reduction targets, according to the Monetary Report that the Bank of Greece published on Monday. The report found that while the sale process is continuing, the pace has slowed.

Authorities are considering a proposal that foresees banks being offered collateral for nonperforming loans through a special investment vehicle for their immediate capital relief and the efficient tackling of the bad-loan problem. Kathimerini understands that a study to that effect has already been processed by the Hellenic Financial Stability Fund.

Greece has a lot to learn from Cyprus when it comes to tackling nonperforming loans, as Greek banks face a daunting task in slashing their bad-loan stock by 40 billion euros by the end of 2019, according to their pledge to the European Central Bank.

Banks intend to repurchase a large part of the properties they will auction off, aiming to ensure the efficient operation of the new online system and prevent a dramatic drop in property prices that would have an impact on their financial reports.

Banks could obtain a benefit of 7 billion euros from the acceleration of judicial procedures and of the liquidation of collateral regarding nonperforming loans - which typically are real estate properties - according to a Bank of Greece report on the Greek credit system issued on Tuesday.