Poor retrieval rate from ‘bad banks’

The resolution of Greek credit institutions that were split into “good” and “bad” banks has led to the collection of just 545 million euros out of the 2.45 billion euros in borrowers’ debts that had been deemed retrievable.

This amounts to just 21 percent of the amount that is supposed to be recovered from the bad banks, a performance that is quite disappointing.

In total, 12 credit institutions – six commercial banks and six cooperative lenders – that reached an impasse in recent years were financed to the tune of 13.5 billion euros by the Hellenic Financial Stability Fund. Out of the problematic side of their assets (mostly nonperforming loans), about 11 billion euros, or 82 percent, is seen as probably impossible to recover. This is due to the very poor quality of the loans issued during the euphoria of the previous decade, without the necessary collateral.

Of the 545 million euros of debts to defunct banks that the resolution mechanisms have managed to retrieve, 345 million was from the resolution of the former ATEbank. That is attributed to the large size of that lender, which is why it received 7.47 billion euros in financing from the bank bailout fund.