New NPLs contained at €3-4 bln

The annual results from three out of the country’s four systemic banks point to the creation of new bad loans amounting to 3-4 billion euros due to the pandemic, out of a total of €20 billion in loans whose servicing has been suspended. This is about 15-20% of the debts frozen in 2020, with many of them having emerged from their suspension which are now being partly or fully serviced.

The course of delayed loans, based on data from Alpha, Eurobank and Piraeus – National will announce its 2020 results on Friday – confirms banks’ estimates that Covid-induced bad loans will not exceed €5 billion.

This will depend of course on the duration of the pandemic and on whether the loans currently in an arrangement scheme will avoid turning nonperforming. This is to a great extent thanks to the Gefyra state subsidy program for loans, to which 20% of loans in moratorium have already or are about to be included: A tenth of the frozen loans was included in the original Gefyra program that concerned mortgages, while another 10% will be included in the Gefyra 2 program for corporate loans taken out by companies or freelance professionals hurt by the pandemic.