Four firms express interest in NPL management

Four companies have submitted requests to the Bank of Greece to obtain a license to manage the nonperforming loans (NPLs) of households and small businesses, Kathimerini understands.

Apart from the joint venture launched by Alpha Bank and Spain’s Aktua and the transformation of a similar company that is part of the Eurobank group into a firm that can manage bad loans, permits have also been requested, according to sources, by a large legal office that is involved in this business and another NPL management agency that is already active in Greece, as well as abroad.

The Alpha-Aktua joint venture is targeting the management of 10 billion euros in NPLs, made up of mortgages and consumer and business loans.

According to the new legal framework approved recently, the level of share capital needed for firms who want to be involved in the management of NPLs is 100,000 euros, which is considered relatively low.

However, there are a number of other demanding criteria, which aim at ensuring transparency in terms of the targets the companies set and the methods that they use.

A new code of conduct published by the Bank of Greece last week provides banks with a new set of options to reach settlements with customers who have fallen behind in loan repayments. These options, which include homeowners transferring the deeds to their properties to their lender and then paying rent to remain in the house, will also be open to the bad loan managers.

The debt collection firms will not buy the NPLs from the banks; instead, they will be responsible for communicating with the lenders’ clients and taking on responsibility for managing the loans. The firms will be able to offer bank customers a range of options to at least start paying part of their debt back, such as extending the maturity of the loan and paying interest only.

The banks will be obliged to inform customers that management of their loans is being transferred to the new companies.