Mortgage loans: These are bank proposals

The regular four banks Greece submitted their proposals to housing loansAfter the alarm, Finance Minister Christos Staikouras analyzed the criteria and beneficiaries.

These are Alpha Bank, Eurobank, National Bank of Greece and Piraeus Bank, which describe in detail the plan to support mortgage installments for about 30,000 vulnerable people, in a joint announcement they made today, Thursday (15.12.2022).

In particular, as stated in the Appendix to the Notice on Beneficiaries and Criteria, the Vulnerable Borrowers Support Plan is within the social responsibility programs of each banking institution:

• Beneficiaries: Borrowers who have a home loan or even a small business loan, secured by collateral on the first stay.
• income criteriaas defined by Law No. 4472/2017 regarding inclusion in the event of weakness, i.e.:
• Annual income up to €7,000, increased by €3,500, for each family member, with a maximum annual income limit of €21,000, maximum value of primary (first) residence €180,000 (based on ENFIA account value) and total deposits up to €7,000 , an increase of €3,500 for each family member with a total deposit limit of €21,000.
• Dues: current current debts, i.e. loans overdue up to 90 days, with a reference point (for current or not) the date the application was made by the creditor. Debts arising from new loans granted after today’s date are not eligible.
• support rate: 50% interest rate increase (date of calculating the increase 30.6.2022). Subsidy is suspended if the debtor is late in paying its installments for a period of more than 30 days.
• Support schemeCreation of a CSR fund, with equal contributions from the four systemic banks, which will be managed by a third party (EGDIX) through the GEFYRA platform, to which the beneficiary’s application will also be submitted.
• Duration of support: 12 Months.
• The Application deadline It will be set and announced.

In detail the joint advertisement of banks on housing loans:

The four banks are engaged in a constructive spirit in the institutional dialogue with the Ministry of Finance.

During a meeting yesterday (14/12) of their managements with the Minister of Finance, Mr. Christos Staikouras, each bank, based on its own approach, statements, positions and proposals on a series of issues related to the operation of the financial system. , and their response to the need to finance a growing economy and support families and businesses in the current situation.

In this context, each of the four systems, based on its own characteristics:

• It presented, in particular, the results of its credit policy and its contribution to the strong growth rates recorded by the Greek economy this year. Greece’s net credit expansion to businesses during the first 10 months of 2022 was €4.5 billion (10.8% yoy) and by the end of the year it is expected to approach or even exceed €7 billion. Moreover, within the context of the Recovery and Resilience Fund (RDF), banks have assessed and made total investments on behalf of their clients of around €10 billion, of which up to 40% will be financed by credit institutions. These investments cover almost all sectors of the Greek economy and are expected to create tens of thousands of jobs in the coming years. The banking system also plays an active role in attracting foreign direct investment to Greece, which in 2021 reached 5.5 billion euros (3% of GDP), a historic high that is expected to be exceeded this year.
• The CSR plan has been submitted to the Finance Minister to subsidize loan installments that vulnerable households have received in the past, in order to reduce the burden on servicing their loan obligations from the ECB’s higher interest rates. The development of the Vulnerable Support Scheme took into account the existing supervisory framework and was reviewed by the European Supervisory Authority (SSM). Specific conditions and specifications are described in detail in the attached appendix. The subsidy scheme includes all existing loans to vulnerable borrowers, regardless of the originating bank of the loan, whether it is regular or not, whether it remains on the bank’s balance sheet or is transferred to third parties. Based on the above criteria, it is estimated that at least 30,000 borrowers are eligible for subsidies, for loans of at least €2 billion. The four systemic banks will jointly and equally bear the total cost of the programme, within the framework of their corporate social responsibility programmes, which are being developed separately by each bank.

During the meeting with the Minister of Finance, the following was discussed:

• Cases related to the mechanism of extrajudicial action stipulated in Law No. 4738/2020. Banks affirmed their support for the out-of-court private debt settlement mechanism, which, along with bilateral debt settlements, is an important tool for private debt management. In the course of cooperation with EGDICH, the reduction of interest rates for relevant algorithm settings has already been examined with the Special Secretariat, while proposals for further optimization are also being examined and are expected to be finalized at the beginning of next year. The goal is to significantly increase the approval rate for borrowers who apply for debt settlement through an out-of-court mechanism, including those who realize they have experienced a decline in their incomes. The past months have already seen an increase in approval, a trend that is expected to continue. Reducing non-performing loans to a single-digit ratio is an overall success for the Greek economy, paving the way for the country’s return to investment status.
• The course of interest rates, as determined by the European Central Bank, and the impact of monetary policy on deposit rates. The Greek banking system guarantees citizens’ savings and the country’s business development perspective. This was also confirmed during the past three years, with interest rates on deposits remaining in the positive zone, at a time when the average interest rates on time deposits in the Eurozone were at negative levels, hovering around -30 basis points. As a result, term deposits in Greece have generated much higher returns than in the eurozone, a development that has brought interest rate interest to Greek companies approaching or exceeding €300m. In yesterday’s meeting with the Minister of Finance, each bank committed itself individually and based on its commercial strategy to constantly review the interest rate policy, which resulted in the process of covering the deviation recorded in the past two months as a result of a greater speed in adjusting European banks, which started from the negative interest rates in previous years. Greek depositors are already being offered a series of options that combine security and returns. For example, term deposits of 12 months or more have annual returns, depending on the bank and on the amount, that reach or exceed 0.80%. Each bank will continue, separately and independently, to adjust its deposit rates, taking into account relevant ECB decisions, internal policies and broader money market conditions.
• Fees are important for various simple banking transactions. Each bank individually and based on its commercial policy plans and reviews a series of commissions for the provision of banking services in accordance with current European legislation. It is indicated in this section that with regard to incoming and outgoing transfers, DIAS – a national clearing house for interbank payments, in which the four systemic banks are shareholders – has developed a series of electronic services that are provided to customers, companies and individuals, free of charge. For example, with the already existing IRIS payments service, it is possible to transfer money for free from anyone to anyone, whether natural or legal person, up to the amount of 500 euros per day, in real time via mobile banking, without having to Non-mobile number account – This is in the secured payment environment, according to the European SEPA instant credit transfer system.
• Each bank, depending on its commercial policy, carries out targeted commercial activities throughout the year (bonus programs for its customers for transactions through debit and credit cards), in cooperation with retail trade. It is estimated that the local banking system will spend an increased amount in 2022, about 50 million euros, to finance specific programs, an amount that is directed directly to cardholders and ends up in Greek companies, contributing to an increase in their turnover.
• Finally, we must not forget the most important contribution of banks to matters of corporate social responsibility, since through sponsorship programs they support institutions and organizations in the sectors of health, society, education, forest firefighting and culture, with similar amounts in the last four. years up to 60 million euros.

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