“It is estimated that in the coming days, during Holy Week, there will be further announcements from the banking system to help informed borrowers.”

This is what the Minister of Finance, Christos Staikouras, said in the parliament, in response to a relevant topical question by PASOK-KINAL MP, Odysseus Konstantinopoulos, who spoke of “huge profits of the banks due to the exorbitant increase in loan interest rates and the simultaneous exorbitant reduction in interest rates of the deposits”, as he characteristically stated.

As Mr. Staikouras pointed out, he is waiting “to be completed, to be agreed with the supervisory authorities and to be officially announced, in the next two days, the subsidy of the interest rate increase with an interest rate ceiling on mortgage loans with a variable interest rate”, while he clarified that the regulations will also concern Swiss franc borrowers.

“So the banks will come and put a ceiling on mortgages at the cost of those that have a floating interest rate for natural persons. Because it seems that the perimeter accepted by the European supervisory authorities can go as far as that. This is expected to be agreed by banks and regulators in the next 48 hours. It will also be Swiss franc loans”, said Mr. Staikouras, calling on Greek bankers to proceed with more sustainable arrangements for vulnerable borrowers.

“The banking system must do more to help both in terms of deposit returns and also to help borrowers who may have very big difficulties in the future due to the increase in interest rates. And the loan managers owe the many arrangements that have been made in the previous four years, to re-evaluate them, to get closer to the citizen and to see how they will submit sustainable arrangements. Because indeed, in the last two years, due to the new challenges and accuracy, many of those who regulated their loans find it difficult to comply with the regulation. So they should submit more sustainable regulations for society”, he underlined, noting at the same time that “the solutions are not easy and this is because there is a very strict framework in Europe now, not in any case the equivalent that existed during the corona virus period”.

For his part, Mr. Konstantinopoulos pointed out that “the profits of the banks at the expense of consumers are outrageous, which, at the same time as they collect outrageous interest rates from borrowers that reach 10%, have drastically reduced the interest rates on deposits with 0.1, 02 and 0.3%’.

“The profits of the four banks reached 5.4 billion euros, but they do not even do the obvious thing to support the borrowers. Due to the European Central Bank’s hikes, borrowers are currently seeing their loan servicing costs rise dramatically. The result is that banks win and borrowers risk defaulting on their loans. We ask the government what initiatives it will take? Will there be taxation on bank profits? and what will be done with the gross unfairness between lending interest and deposit interest?’ said the PASOK MP KINAL.

In response, Mr. Staikouras acknowledged that banks’ profitability has indeed increased, pointing out, however, at the same time that the banking system is more stable and can cope with any external shocks.

“Today indeed, due to the increased profitability of the banks, the banking system is more stable than it was in 2015 and 2019. So there is the possibility to cope with any external shocks”, he pointed out and added:

“For four essential reasons the banking system is much stronger today than it was in the past.

First: the energy sector of the banking institutions has been cleaned up, the volume of bad loans has decreased, which are now 8.7% of all loans from 44% that we received in July 2019.

Secondly: In that deposits have increased significantly by approximately 50 billion euros.

Thirdly: Their capital adequacy is strengthened and the ratio is well above its minimum limit of 17.5%

Fourth: Greek banks recorded significant profits in 2022 amounting to 3.8 billion euros after taxes. The 3 billion euros are non-recurring profits which strengthened the capital adequacy ratios and allowed the banks to regulate their bad loans”.

“Indeed, in deposits there is a strong desire expressed in all tones by the Greek government from December 2022 to increase deposit rates, not by all banks at the same time, but by each bank separately because this is what competition imposes, which was too much very low indeed”, said Mr. Staikouras.

The Minister of Finance also spoke about “some steps that have been taken by the banks which are equivalent to the average European term, however more needs to be done”.

“In any case, there is a challenge in front of us and that is that the monetary policy, due to the high and persistent inflation across Europe has led the ECB to exercise a more contractionary monetary policy, i.e. to increase interest rates and it is estimated, according to the data provided by its leading executives, that there may be a further increase in monetary policy interest rates in the future. This will have adverse effects on the lending of governments, households and businesses. And there the issue is not just reading or recognizing the problem, but taking specific decisions and initiatives”, said Mr. Staikouras

“The banks are earning too much and a part of it must be returned to the people. They must become a real pillar of development and the government must do justice to the huge amounts they earn. The banks want us to be together in their losses but to be alone in their profits”, commented Mr. Konstantinopoulos.

“Banks need to do more and we all need to rise to the occasion. Political parties, banks and loan servicers. In this sense, the intense public harassment of the Greek government at all levels in the banking system has some visible results, such as the small increase in yields, which should be higher on deposits”, noted Mr. Staikouras.