Mortgages: The installment subsidy platform opens tomorrow

The application platform for subsidizing the installment of mortgage loans for 30,000 vulnerable borrowers opens tomorrow, as announced by the four systemic banks.

Borrowers will be able to submit their applications on the platform (at the link https://www.gov.gr/ipiresies/periousia-kai-phorologia/diakheirise-opheilon/bebaiose-eualotou-opheilete), in order to be eligible for the relevant support, with the first step being the issuance of a relevant certificate of a vulnerable borrower through the information system of the Special Secretariat of Private Debt, it is stated in a joint announcement of the four systemic banks (Alpha Bank, National Bank, Eurobank and Piraeus Bank).

In detail, the joint press release of the banks

The Greek banking system actively supports the development course and the transformation of the Greek economy and, at the same time, stands as a helper for Greek businesses and households, both for the implementation of their plans and for dealing with extraordinary difficulties.

Development of entrepreneurship, growth of the national economy

During 2022, new financing (net credit expansion) to businesses approached, for the entire banking system, €8.5 billion, increased by 12.3% compared to the previous year, at the same time that the banks are actively participating in the utilization of the Recovery and Resilience Fund (RAF), having evaluated and submitted on behalf of their clients investment proposals amounting to €10.5 billion, which, at a rate of about 40%, are financed by credit institutions. At the same time, the Greek banking system is intensively active in the effort to attract foreign direct investments, the amount of which is expected to significantly exceed last year’s historically high performance of €5.4 billion or 2.9% of GDP, thus contributing to the modernization of the Greek economy , increasing GDP and creating more and better jobs.

The basis for the ability of banks to financially support Greek entrepreneurship and the plans of Greek citizens was the reduction of non-performing loans, through the utilization of the “Hercules program” of the Greek State and the further strengthening of the banks’ capital, both organically as well as through equity capital increases with the participation of the private sector. Preserving this result is critical both for the prospects of the Greek banking system and for our national economy as a whole, as it paves the way for the achievement of the investment grade target within the year.

Active support of borrowers

At the same time, in the context of their distinct strategic development plans, but also in continuation of the dialogue with the leadership of the Ministry of Finance, the four systemic Banks are promoting a series of actions for the active management of their portfolios, with the aim of supporting borrowers facing difficulties.

With regard to the support plan for informed vulnerable borrowers, which was agreed upon in the round of meetings with the Minister of Finance, Mr. Christos Staikouras, for subsidizing the installment of mortgage loans or small business loans, with collateral on the first home, the Banks are proceeding, with the same costs in the rapid implementation of the platform that will welcome the requests of the beneficiaries. From tomorrow, February 1, 2023, borrowers will be able to submit their applications on the platform (at the link https://www.gov.gr/ipiresies/periousia-kai-phorologia/diakheirise-opheilon/bebaiose-eualotou-opheilete), in order to qualify for the relevant support, with the first step being the issuance of a relevant certificate of a vulnerable borrower through the information system of the Special Secretariat of Private Debt. It is recalled that the plan provides for a subsidy of 50% of the interest rate increase (with a reference date for calculating the increase on 30.6.2022) for a period of 12 months, while the corresponding amounts are estimated to start being credited to the accounts of the beneficiaries in April. The entire expenditure for the support of vulnerable borrowers will be covered, within the framework of the distinct corporate social responsibility actions of the financial institutions, with equal contributions from the four (4) systemic banks.

At the same time, the Greek banking system utilizes the out-of-court personal debt settlement mechanism, an important tool for private debt management, and proceeds with a series of bilateral settlements supporting borrowers who face temporary difficulties in servicing their loan obligations.

As far as out-of-court settlement is concerned, the admissibility by banks of the loans they hold in their portfolios has increased significantly. The approval rate for the entire banking system now stands at 55%, 10 percentage points higher than in September 2022, confirming the ever-increasing trend in approvals. Since the launch of the platform, around 2,800 borrower applications have been approved by the systemic banks for total debts exceeding Euro 116 million.

Additionally, based on each bank’s distinct policy on the matter, the Banks have in the past, and continue to implement, bilateral loan arrangements, ensuring the quality of their portfolios and, above all, offering sustainable solutions to their customers. During 2022 alone, responding to the need to support households and businesses, the country’s systemic banks entered into bilateral agreements with 86,350 borrowers for loans of more than €5 billion, of which €2.5 billion concern housing loans , secured by real estate.

Interest rates and bank charges

Regarding the issue of interest rate and commercial policy, the Banks, separately and independently based on each one’s policy, constantly readjust the interest rates on deposits and loans, as determined by the ECB, and proceed on a regular basis to review or even reduce commissions that provided for the provision of banking services, in accordance with current European legislation and market competition conditions.

Already, Greek depositors are offered a series of options that combine security and significant returns, taking into account the relevant decisions of the ECB and the internal policies of each bank. For example, yields on term deposits of 6 months or longer have been on an upward trend over the past few months, with yields for a period of 12 months or longer hovering above 1%, depending on the bank and amount of the term deposit.

At the same time, Greek banks offer the general public, in compliance with MiFID rules, bond investment programs with significantly higher yields, which incorporate the trend of interest rates in international markets.

At the same time, borrowing costs in Greece are increasing at lower rates than in the Eurozone, both for households and businesses, despite the comparatively higher borrowing costs of Greek banks and the Greek State. It is characteristic that from October to November 2022, contrary to the trends in the Eurozone, Greece recorded a net reduction in the cost of new loans for households.

Finally, with regard to the procurement of banking operations and products, each bank individually and based on its commercial policy, regularly reviews its pricing policy, with the aim of ensuring profitability and limiting the time and financial burdens on businesses and private individuals. In our country, individuals can now make – free of charge – remittances of up to €500 per day, via their mobile phone and the IRIS service.

At the same time, each bank, separately and autonomously from the rest, has reduced certain additional banking fees. Such adjustments are different for each bank, depending on the commercial policy of each one, but indicatively they concern the purchase of Greek government securities, assessment of mortgage requests, bill payment, credit card subscription, etc.

Greek banks annually invest hundreds of millions of euros in strengthening the security and functionality of their technological infrastructures, in order to provide their customers with the ability to immediately carry out an increasing number of digital banking transactions at a lower cost. They thus contribute to the strengthening of electronic transactions and to the consolidation of a modern transactional consciousness.

Finally, each bank, depending on its commercial policy, carries out targeted commercial actions throughout the year (reward programs for its customers for transactions through debit and credit cards), in collaboration with retail. Especially, for the Easter period, as well as the recent Christmas period, each bank individually plans actions with a significant increase in rewards and retributive benefits in categories that cover the basic needs of Customers such as super markets, fuel, clothing, etc. .

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