Our Core Markets

The €237bn Greek economy experienced a deep and protracted recession between 2008 and 2018 as a result of the Global Financial Crisis and the Greek Sovereign Credit Crisis with GDP decreasing by over -24% in both real and nominal terms, thus causing a wide range of financial dislocations.

Our Core Markets

As a combined result of the above (and in a negative feedback loop), by 2018:

Greek Bank NPL’s rose to €108bn or over 55% of total outstanding loans
Greek real estate prices across all segments decreased by ca -50%
Greek banks required 3-4 rounds of recapitalization totaling over €50bn and a ca €20bn Government-Backed Asset Protection Scheme to offload ca. €45bn of NPL’s
Greek banking sector has consolidated into four banks holding over 85% of all banking assets and Loan-to-Deposit Ratio has reduced from 115% in 2008 to 64% in 2024
Net bank lending, particularly to SME’s has decreased markedly. Even in the current positive economic (rebound) growth cycle (between 2019-2024) total SME net bank lending has reduced by -11% from €44bn to €38bn in total. Particularly in the Manufacturing, Construction and Wholesale & Retail Trade sectors, net bank lending to SME’s has decreased by -45% (from €25.7bn to €14.2bn)
Bank loans managed by regulated loan servicers have grown to €74bn in 2024 of which €35bn are corporate, SME and SBL. The restructuring of these loans has been slow due to the lack refinancing options, low prices and liquidity in the Real Estate markets between 2010-2017, a severe backlog in the judicial/enforcement system, inefficiencies in the servicing sector and misaligned incentives.
Regulatory restrictions to systemic and non-systemic Greek banks limit their ability to lend directly into the SME and ABL sectors.
As a result of strong official sector support, the Greek economy is growing strongly again and Greek lenders are experiencing strong loan growth but focused on large corporates and shipping, hospitality, logistics and energy sectors.
Greek banks are reporting strong returns (15-25% ROE) and operational profitability well in excess of the broader Eurozone sector
However, the broader SME market which generates 85% of employment is in a credit-less recovery, reporting dire lack of access to finance.
In the key manufacturing, (wholesale & retail) trade and construction sectors, the debt overhang and lack of new credit is hampering faster growth and much needed consolidation.