A draft law aiming to further reduce non-performing loans in banks’ portfolios via the expansion of the “Hercules” program was tabled in Parliament.
More specifically, it provides measures to enhance transparency and ensure better information and respect of debtors’ rights for servicers, modernize an out-of-court mechanism and expand protection for vulnerable debtors, improving the operating framework of a sale and leaseback agency.
It also includes measures to boost competition, such as loan offering from non-banking agencies, and expanding transactions through the IRIS system.
“Servicers will now operate under new and stricter transparency rules. The out-of-court mechanism becomes simpler, while the expansion of the Hercules program will operate for the benefit of the banking system,” National Economy and Finance Minister Kostis Hatzidakis said.
Following an agreement with the European Commission, the expanded ‘Hercules’ program will have a guarantee offer ceiling of up to 2 billion euros and will last until December 31, 2024.
The bill will be submitted to the competent parliamentary committee next Monday. It will also help to reduce the “bad” loans of Attica Bank and Pancreta, so that their merger and the creation of the 5th banking pole becomes possible.
In the previous two phases of the program, the Greek state offered guarantees worth 18.7 billion euros, reducing non-performing loans from 40.6% in December 2019 to 8.6% in June 2023.
