By Chrysostomos Tsoufis

By doubling it LIGHT for the non-performing loan properties they have in their portfolios, the government is stepping up pressure on banks and management companies to get them on the market.

It is estimated that the banks have at their disposal about 20,000 properties, half residential and the other half business. The servicers have 13-15,000 properties. Properties that are stagnant since they have no use.
The double ENFIA will increase the cost of maintaining this stock of properties and therefore the pressure to bring them to market by increasing supply and therefore pushing down purchase and rental prices according to the government’s rationale.

Of course, many of these properties – in the case of servicers, the figures say about 2 out of 3 – have issues that need to be fixed. Such as for example urban planning violations which in order to be settled need time and money which banks and administrators do not have or do not want to allocate.
The proposal of the servicers that the buyer of the property undertakes the obligation of settlement – through the auction process – does not seem to be progressing.

The other big issue on which the government is intensifying the pressure on the banks is the issue of commissions from which the resulting revenues approach €2 billion.
A besieging ram will be the Community directive that provides for the equalization of the commission for remittances with that applicable to direct payments such as e.g. the IRIS system. Up to €500 the transfer of money through IRIS is free, a fact that will push banks to adjust their fees downwards.
For larger amounts there may be legislative regulation
The decision of the Central Bank to publish twice a month, starting from January 7th, in detail exactly what the banks charge, and also the extension of payments through IRIS, will act as a reinforcement.
But the range of commissions is wide as banks charge almost everything and the legal arsenal is finite. Consequently, here the government also expects important voluntary initiatives and Kostis Hatzidakis made this clear in the meeting he had with the managements of the banks last Friday afternoon.

The government is not happy with either the level of bank lending or its cost. The ECB’s comparative data show that in all categories the Greek banks it is in the top six of the most expensive. In this part, the pressure will come through the simplification of the framework so that they can receive loans and large enterprises outside the banking system, such as e.g. PPC or OTE. Doing so will increase competition and lower interest rates on new loans, according to the finance staff.

There will also be interventions for the upward adjustment of deposit interest rates, which in Greece are among the lowest in Europe