NPLs: The big bet in Greece’s recovery

NPLs are the red flag in Greece’s economic recovery. With the highest ratio in Europe (47%) and still at very high volumes (c.80 billion Euro) Greek NPLs are the make or break component for Greece’s economic recovery. During the 2-day NPL summit organised by DDC in Athens, we got a good overview of the pains banks, servicers, investors and the rest of the key players in the Non Performing Loans (NPL) sector are faced with. The SME portfolios of NPLs are of particular interest as 99% of the private sector comprises of SMEs in Greece. Wide Strategy Founder, Lyda Modiano,  chaired the panel on ‘SME portfolios in Greece and Cyprus’; Some of the take-aways from the three panelists, Tassos Iossiphides -Partner EY, Sabina Dziurman -Director EBRD for Greece and Cyprus and Konstantinos Maramenos -Manager Brookstreet Equity Partners were:  

  1. Greek SMEs are much smaller in size than in the rest of Europe and that makes turnarounds more difficult 
  2. Family-owned culture is dominant and frequently acts against remedial solutions such as consolidation to develop critical mass etc. 
  3. Any sort of cooperation or ‘co-’ in general is not welcomed in the sector, which makes it more difficult to manage SME NPLs as the market is too complex and fragmented.  
  4. When the SME NPLs start to be addressed more aggressively by the players in the market, liquidations will become inevitable in many cases, causing a short-term hit on unemployment.

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