Piraeus Bank reduces monthly loan repayments by 50% for 2021
Piraeus Bank will offer borrowers the ability to pay half their monthly payment in 2021 in a bid reduce the number of problem loans emerging from the pandemic.
With the debt payment freeze, also known as the loan moratoria, offered by Greek banks ending last year, there are concerns in the banking system that weakened households and businesses will not be in a position to restore monthly obligations.
In an attempt to smoothen the transition, borrowers whose debt had been included in the loan moratoria program will be able to pay 50% of their pre-pandemic monthly payment in 2021 and 75% of it in 2022, the bank said in an announcement.
Other Greek lenders are expected to follow with similiar initiaves.
Payments on loans worth some 20 billion euros were frozen in Greece last year as the pandemic sent the economy spiralling downwards into recession. Out of the 20 billion euros, experts fear that up to half may turn sour, meaning that Greek lenders will be hit with a fresh batch of bad debt reaching 10 billion euros.
Currently, the country's financial system is still wrestling with non-performing loans of 63.4 billion euros left behind by the country's ten-year economic crisis, amounting to 35 percent of total loans held. The average in the EU is at around 3 percent.