Bad loans are not expected to exceed 2 billion euros following the damage Thessaly suffered while efforts are being made so that they are set even lower, Greece’s credit institutions said.
Banks seem willing to take brave decisions to relieve the flood-stricken people of Thessaly as part of their corporate social responsibility.
A loan of 10 billion euros, based on the deposits, is a first rough estimate for the Region of Thessaly according to banking officials, who argue that the support measures to be announced within the week will not allow NPEs to exceed 2 billion euros.
Major damage
Without the economic aid measures, the losses for the credit institutions would be significant, as it is estimated that at least 50% of the region’s loans could develop into NPEs. The Region of Thessaly has approximately 8.2 billion euros in deposits, based on official figures from the Bank of Greece in the first half of the year. Based on the loan-to-deposit ratio (80%, including NPEs) for the entire territory, it is estimated that Thessaly’s borrowing amounts to 10 billion euros.
The damage is great and concerns houses, industries, crops. Nevertheless, the measures that will be taken to support the rural and business population of the region, as well as private individuals who currently do not have even the basics to live, are expected to be important.
What did the bankers discuss?
The CEOs of the banks met in order to agree on a minimum of measures while their contacts with the government and especially the financial staff are ongoing in order to clarify as soon as possible the needs and the necessary support that will allow the local economy to restart.
The relief measures of the banks will reach the highest possible level, but at the same time will not affect supervision. It will obviously be difficult to grant loans, but the reconstruction of the area and its operations will be supported in every way within the framework of corporate social responsibility.
There will certainly be relief measures for households and businesses by suspending auctions indefinitely or for a long period of time, offering arrangements, freezing of loan installments, possibly also pricing policy differentiation, while many state and EU subsidized programs will help the banks leverage generous subsidies to make the Thessalian plain fully functional again.
The measures will be fully specified within the next few days.
