The first sale of securitized loans currently held by investment funds to banks is expected to occur around the end of the year or early next, signaling a return to normalcy for households and businesses that owe these loans.

These are the red loans of the past that have now been cleared and will be resold to the banks as green, thus paving the way for the reintegration of these debtors into the banking system and refinancing, if they remain consistent of course. According to K, do Value is launching the first such deal to sell a portfolio of 100 million euros to a systemic bank, which mainly includes housing loans. These loans were transferred under the Cairo Securitization, which was one of the first securitizations carried out by the Eurobank, and after they were regulated and remained in good condition, that is, borrowers have complied with the rules for at least two years. , they can be resold to banks. It should be noted that two years of consecutive servicing is a firm rule set by the European Banking Authority (EBA) so that these loans exit Non Performing Exposures (NPE) and are considered serviceable again.

The first transaction is launched by do Value – it will sell a package of 100 million euros to the bank, mainly mortgage loans.

The return of these loans to banks – apart from the borrowers – has clear advantages, on the one hand, for the banks, and on the other hand, for the funds themselves. In principle, for borrowers, this will mean their return to the banking system and the right to return financing. While their data will remain on Tiresias’ “black list”, adherence to the “two-year normality” gives banks a free hand to re-evaluate these debtors and, if they also meet other lending characteristics, they can be refinanced. The problem is as relevant for housewives as it is for the hundreds of small businesses that, burdened with bad transactional behavior, have found themselves locked out of the banking system due to past mistakes.

At the same time, their return to the banking system will allow banks to increase their loan portfolio at a time when the growth of their healthy balance sheet is needed to strengthen their main source of income, i.e. interest income, and return to consistent profitability. This need is necessary to the extent that the current geopolitical crisis creates heightened uncertainty and retail banking, i.e. new mortgages and consumer loans, is limited and cannot provide a significant increase in the informed portfolio of banks. The picture is similar with the business portfolio, which includes a certain number of healthy businesses, not exceeding 50,000, while taking into account 200,000 businesses with unfavorable financial performance that are not considered creditworthy.

In addition, it will allow funds that have bought back loans through securitization to increase their income and thus cover the purposes for which they have assumed obligations under business plans under the Hercules state guarantee mechanism. It is recalled that “Hercules” provides for specific collection of fees per year, in order, firstly, not to activate the state’s right to reduce commissions for companies managing problem loans, and secondly, not to activate the deprivation of state guarantees. The sale of the restructured loans will generate income that will be included in the proceeds of the foreclosures and thus prevent non-compliance with the Hercules conditions.