About 8 out of 10 end up infertile real estate auctionswhich makes it difficult to solve effectively private debt. This is indicated Commission in a valuation report released yesterday after the memorandum, noting that private debt may have left bank balance sheetsbut continues to be a major problem for economy. A side effect of the mechanism’s limited effectiveness electronic auctions it is also lagging behind the goals that management companies have to achieve in its context “Hercules” and therefore, in the opinion of the Board, remedial action should be taken.

According to the data included in the report, 51,960 real estate auctions were scheduled in 2022, of which 38,869 were held, while in the first quarter of 2023, 11,012 auctions were held. However, the percentage of empty auctions remained at a high level, namely at the level of 78%. This trend has continued despite the possibility of a reduction of up to 65% in the price of the first offer, making the mechanism’s efficiency a challenge to the economy, the Commission points out when proposing process improvements. Additional factors affecting the success of the auctions are the lack of available funding for potential interested buyers and limited market demand for certain assets, despite a relative improvement in property sales through auctions, the Commission said.

His decision Supreme Courtwhich removes the uncertainty associated with real estate auctions, will help speed up the resolution of the problem of non-performing debts.

Commission: Private debt continues to be a major problem for the Greek economy.

The Commission also notes that management companies are showing more initiative to gradually achieve their goals. Among them are portfolio sales. red loans in the secondary market, which allows you to increase cash flows to achieve the goals of Hercules. However, the Board notes that such sales “come at the cost of potential deterioration in future performance” and are not necessarily preceded by effective management of these portfolios.

“To improve efficiency and increase the selling value of portfolios, these transactions may include more restructured and non-performing loans,” the report notes, noting that “effective debt restructuring by asset managers and an efficient secondary market for problem loans will be key.” to economic efficiency.

Banks, for their part, managed to bring NPLs down to 8.7% (end-2022 data), but the Commission believes they should expand their long-term solutions to make the arrangement more sustainable. Mentioned specifically in the report on the “freeze” measure interest rates measures taken by banks to return 50% of the tranche from the increase in interest rates in order to prevent the consequences for households’ servicing of loans.

Also important, according to the commission, is the completion of the remaining pending securitizations under the Hercules program in order to maintain the downward trend in the NPL rate, which remains the highest among European countries. Finally, the challenge is to reduce the NPLs of the small, non-systemic banks that cannot benefit from Hercules. The Commission also notes the high profitability achieved by Greek banks in 2022 as a result of increased interest income and widening spreads between interest rates on loans and deposits, as well as high financial income.

Despite the positive trends, the priority should be to strengthen capital ratios, which remain the lowest among European banks, while the quality of capital due to the high deferred tax rate is a constant source of concern, according to the Commission.