National Economy and Finance minister Kostis Hatzidakis announced that the expansion of the “Hercules III” program by 1 billion euros is being promoted in cooperation with the European Commission so that the index of non-performing loans in the four systemic banks approaches the EU average, which is around 2%.
This means that the “Hercules III” program will be accompanied by state guarantees amounting to 3 billion euros from the 2 billion euros originally planned.
A further reduction in NPLs is expected to help free up funds on the part of banks to increase lending as they keep them tied up as provisions to cover debts.
Based on the latest available data, the ratio of non-performing loans of the four systemic banks has fallen to 3.6%. If one takes into account the bad loans of the smaller banks, with the exception of the systemic ones, then the non-performing loan ratio stands at 7.6%.
Attica and Pancreta
Attica Bank and Pancreta have already submitted a request for the securitization of portfolios, amounting to approximately 3.7 billion euros. In particular, Attica Bank has requested the securitization of a portfolio with a total book value of 2.3 billion euros, with the guarantees for the high priority bonds estimated at 750 million euros. Pancreta, the “Rhodium” portfolio, with a gross book value of 1.38 billion euros. The above amounts correspond to state guarantees of 1.2 billion euros. The main objective is to reduce non-performing exposures through “Hercules III” to 3%.
In addition to the Attica Bank and Pancreta Bank securitizations, “Hercules III” has already received relevant approval for the portfolios:
-Frontier II of National Bank, for non-performing loans amounting to 1 billion euros, with state guarantees totaling 360 million euros and
-Sunrise III of Piraeus Bank, for the amount of 508 million euros, with state guarantees amounting to 143 million euros.
It is noted that through the “Hercules” program the ratio of non-performing loans in the four systemic banks has fallen from 45% in 2019 to 7.5% in March 2024 and is now at 3.6% based on the data of the Bank of Greece.
