Hercules completes the labor |

The Greek state’s Hercules asset protection mechanism, launched in December 2019, is in the final stages with the new securitization of € 4.5 billion of non-performing loans by October.

So far, the scheme has guaranteed a total of € 49.5 billion in loans securitized by four Greek system banks. The inclusion of a € 1 billion Frontier II portfolio submitted by the National Bank this week marks the end of Hercules.

This month, Pirayus Bank will file an additional € 800 million request for the Sunrise III portfolio, and fifth creditor Attica Bank will begin securitizing four portfolios totaling € 2.7 billion.

In total, the securitization that Athens provided with state guarantees is expected to be close to € 55 billion.

Hercules’ financial products are catalysts, even though the country has not yet secured investment eligibility, as it helps banks eliminate bad debts at low cost, based on the pricing of the Greek risk premium. It has become.

The price of credit default swaps (CDS), which are the basis for calculating guarantees that banks pay to the state to receive government guarantees, is now close to 170 basis points and a year ago close to 70. bps.

Despite rising costs, Hercules’ mechanism is a window of opportunity to fully integrate banks’ balance sheets and achieve a single-digit non-performing loan ratio by the end of 2022.

The size of the resolutions implemented so far is reflected in the figures, and adjustments based on this will predict the percentage of bad exposure (NPE) by the end of 2022. In the case of Alpha, it will be 7% from 45% in 2019. National’s 2019 31% to 6%. Eurobank from 33.5% to 5.8% in 2019. It will be 9% from 49% in 2019 for Piraeus.

Absolutely, bad debts have been reduced based on first-quarter data. Alpha is 4.9 billion euros, National is 2.1 billion euros, Eurobank is 2.7 billion euros and Pizzeria is 4.7 billion euros. Hercules completes the labor |

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