Galery

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The assessment of 80% of the loans granted by the 7 largest banks is A and B. However, the fact that 10% of the loans had not been granted in compliance with the politics of proper management and were considered ineligible offsets this high rate.

In terms of risk, the rate of loans assessed A and B drops to 54% and the assessment of 28% is D, as they had not been granted in compliance with the policy that must be implemented to secure healthy lending. The loans of 5 banks in Group B, namely Millennium Bank, Credicom, Geniki Bank, Attica Bank, T-Bank, had been checked since they amounted to over 500 million euro as well as the total loan portfolio of another 5 banks. The assessment of 46% of loans for the purchase of a car, 40% of credit card loans and 29% of other consumer loans is negative.

Business Loans

Downtrend in the price of securities

Regarding business loans, the total exposure of banks from Group A amounted to 41.7 billion euro.

The total gross value of tangible collateral securities which the banks had had up to the date of the report (30.06.2011) amounted to 261.8 billion euro and included personal and business collateral securities, excluding shipping loans. The tangible business collateral securities amounted to 99.8 billion euro. Their present value recalculated by BlackRock on the basis of current market prices is 71.8 billion euro.

Apparently, within three years from the beginning of 2011, real estate prices (until 2014) decreased by 17% in the core index and by 27% in the critical index (stress case). There has been a general decline in real estate prices (from 2008 to 2014) in the range of 52%. (In 2008, the value of a property was +35% and in 2014, -17%).

Loans to medium-sized enterprises

The total exposure of banks in lending to small- and medium-sized enterprises amounted to 42.8 billion euro, 32.8 billion euro of which correspond to tangible collateral securities. The study of the total exposure of small and medium-sized enterprises had established that the exposure of 279 borrowers amounted to 1.09 billion euro.

BlackRock determined 47% of a general sample of 279 loans as risk in comparison with the 39% considered as risk by the banks.

Collateral securities: 46% of enterprises provided property as collateral securities and the rest tangible collateral securities. Furthermore, 84 % of the sample participants stated that they had provided personal or business collateral securities.

Professional loans

The exposure of banks amounted to 27.2 billion euro. BlackRock determined 51% of the loans in a general sample as very risky in comparison with the 43% determined as risk by the banks. In addition, the banks had restructured and extended the period of repayment of the loans, and provided a grace period for 27% of loans while 45% of the loans had been corrected.

The collateral for 31% of the loans was real estate and for 63% personal property.

Housing loans

The number of housing loans was over 1 million, amounting to 65 billion euro. The practice of downplaying the risk of loss varied from bank to bank and was within the range of over 30%. The assessment of 88% of loans granted by banks from Group A  is A and B but the fact that 90% of the loans had not been granted in compliance with the accepted practices that should have been followed to avoid potential risks offsets this high rate. Moreover, BlackRock suggests that 39% of housing loans should be forgiven.

This conclusion was officially included in the report issued after a meeting on property market issues, held on 2 December 2011.

Then it was estimated that the tax assessment of real property for which a public tender had been started was 33% lower than the market value. The company had also found out that the first tenders for the sale of the property were not always successful and, therefore, it offered forgiveness higher than 33%. The procedure for the public sale of the property is used as a last resort but, in Greece, it is the only possible option for the lenders to get their money back.

Data from only 5 banks from Group B, namely Millennium Bank, Credicom, Geniki Bank, Attica Bank, T-Bank had been requested as they had granted loans worth over 500 million euro.

Another 5 banks, namely FBB, Panellinia Bank, Probank, Proton Bank, the Investment Bank of Greece, had been requested to present general information on their portfolio by asset categories, such as housing loans, credit card loans, loans for the purchase of cars and other consumer loans.

7.5 billion euro for shipping

The total exposure of banks to loans in the field of shipping amounted to 7.5 billion euro.

Only 5 banks in Group A had granted such loans, namely the National Bank of Greece, Eurobank, Alpha Bank, Piraeus Bank and Emporiki Bank. BlackRock had requested data from one bank in Group B, namely Aegean Baltic Bank, which specializes in granting such loans. The banks' portfolio included 305 vessels aged 0-4 years, 178 vessels aged 5-9 years, 154 vessels aged 10-14 years, 209 vessels aged 15-24 years and 130 vessels aged over 25 years.

Conclusions of the assessment

For the purposes of the analysis, BlackRock had requested information on the level of loans granted up to 30 June 2011, on all loans or loan commitments that existed in the banks in individual accounts, special loans granted by Greek or foreign branches as well as on loans granted and owned by leasing companies, commercial companies and financial companies operating in Greece as subsidiaries.