Strong increase in loan recoveries following higher auctions

During the last quarter, more than 10,000 auctions were completed. For the months of May, June and July, approximately 5,000 auctions were planned per month, of which approximately 1/3 correspond to houses.

Banks and loan servicers have expressed satisfaction that auctions have returned to normal after two years of the pandemic. In the last quarter, more than 10,000 bids have been completed, approximately 2/3 of those posted on the electronic platform concerned.

For the months of May, June and Julyon 5,000 bids were planned per month, of which about 1/3 corresponds to houses. The remaining assets up for auction are either commercial or industrial real estate, land, warehouses, etc.

For the period from July 16 to the end of August, the auction freeze period due to public holidays, nearly 2,800 bids have been published on the platform. This year, the judicial vacation period is reduced by one month, in order to regain the ground lost during the pandemic. Normally, judicial holidays begin on July, 1st and finish the September 16.

Snap Poll Rejection Relief

It is with great relief that companies in the sector have welcomed the declarations of Prime Minister Kyriakos Mitsotakis denying talk of early elections. “Holding elections, and even by-elections, would lead to a bidding freeze of at least two months due to the suspension of the functioning of the courts,” tells a senior loan officer business daily. “It would derail the restart of the auctions which have gone very well in recent months”, he adds.

As the same source explains, 1/3 of the total revenue for PNP come from forced asset liquidations, and 2/3 from loan restructurings.

Minister wants more restructuring

However, in a recent meeting with representatives of the financial industry, the Minister of Finance, Christos Staikourasstressed the need for restructuring to be prioritized by banks and managers who appear to be rejecting the majority of NPL’s creditor demands.

As highlighted at last week’s meeting, the Ministry of Finance considers that out-of-court settlements and bilateral agreements are the only regular method of putting non-performing private debt on a path to settlement and that unpleasant options, such as auctions, can be avoided.

According to data from the Special Secretariat for Private Debt Managementbanks are rejecting loan restructurings, either amicably or bilaterally at a rate of 67%while the corresponding percentage for management companies is 34%.

However, the special electronic platform of the interim program for the protection of the main residence of vulnerable households has been operating for a few weeks. It provides protection and assistance to vulnerable people with a state subsidy of up to 210 euros for 15 months – that is, until the special body for the acquisition and leaseback of real estate comes into operation.

Dorothy H. Lewis