Greece Tops EU in Non-Performing Loans (NPLs)

NPL in Greece (non-performing loans) remains the top member-state in the EU27 in terms of non-performing loans (NPLs), with 3.3% compared to the Union’s 1.9% average in the first quarter of 2024, according to a study by OCTANE Management Consultants, an Athens-based business consulting and services firm.

The study, which focuses on market trends by analyzing the latest prospects, outlines strategic proposals to deal with NPLs for a more robust market in the Greek banking sector.
In the study, OCTANE highlights the gradual maturation of NPLs in Greece, forecasting growth in the secondary market – the market where previously issued financial instruments, such as stocks, bonds, and derivatives, are bought and sold by investors.

Some of the key takeaways from the study on NPL in Greece are:

• From 2021 until September 2023, over 44 NPL (non-performing loan) transactions valued at over €65 billion, kick-started the market.
• The return of restructured loans to banks and the economy is expected to play a crucial role during the 2024-2025 period.
• Servicers in the Greek market manage assets worth approximately €100 billion, with improved capabilities due to regulatory developments.

To date, 18 servicers have received renewed licenses or extensions of existing ones, pending finalization of the requirements for relicensing, while 5 companies did not proceed with the relicensing process by June 2024, leaving their portfolios to be taken over by other entities.

The study indicates that the picture has markedly improved due to recent efforts over the past years, especially the implementation of the “Heraklis Program”, a state initiative enacted to provide guarantees for banks’ non-performing loans.