The domestic banking system provides competitively priced loans to small and medium-sized enterprises, which also benefit from the programs of the Development Bank and the European Investment Fund, with guaranteed and co-financed loans, with interest rate subsidies for investment purposes. and to meet working capital needs, he noted Theodoris Tsouros Senior General Manager of the main corporate and investment banks of Piraeus, at the 5th International Conference of the Hellenic Chamber of Commerce “World in Transition”.
In the two years 2022-2023, business credit expansion amounted to 9.4 billion euros, with the growth of loan balances amounting to 15.5%, twice the growth rate of GDP in the corresponding period, despite the negative impact on the market jump. interest rates in the Eurozone are at historically high levels, Mr. Tsouros noted. He added that 5 billion euro recovery fund loan agreements were also signed, of which 1.5 billion euro was allocated, which is not counted in the banks’ credit expansion, as well as 10 billion euro loans that were given. Greek shipping contributes up to 8% of the country’s GDP.
It is assumed that the volume of production of new loans, which the domestic banking system is able and willing to offer today, exceeds the demand for new loans from companies and individuals, because the systemic banks have a loan-to-deposit ratio of 60% in comparison; 107% of the average duration in Europe, they have excess liquidity with relatively low costs that they want to use.
“In my opinion, small and medium-sized enterprises today have access to bank financing and really very competitive spreads that are not significantly different from large enterprises. However, since most of the development and investment in our country is carried out by large groups, be it infrastructure projects (roads, PPPs, airports), or green transition projects (RE, batteries, electric cars), or new large hotel units, or bank financing for park modernization should support and follow the country’s production model, it cannot impose it, nor can banks replace entrepreneurs,” he emphasized.
An important part of the lending, about 100 billion euros, is located outside the banking system and refers to securitizations that were carried out in the context of Heracles. Although most of it concerns defaulted loans and bankrupt companies, there is a notable segment related to companies that had difficulties during the crisis and can re-enter the banking system. “In this regard, I believe that non-systemic banks, which do not have the restrictions of systemic banks to finance securitized non-performing loans, play a key role,” said the main corporate and investment bank of Piraeus.
When asked how the experience of a large volume of non-performing loans caused by the financial crisis will affect the lending process of banks, Mr. Tsouros referred to the changes made in the assessment of credit risk, which is more detailed and. strictly now, as well as in assessing the real recoverability of collateral in an unfavorable economic environment.
“As was natural after the long financial crisis, the credit rating pendulum swung to the strict side, but over the last few years it has shifted to a more entrepreneurial approach, both in business lending and retail. In any case, the management of the troubled portfolio has equipped us with know-how and experience, which contribute to a better evaluation of new deals,” emphasized Mr. Tsouros.