Banks join forces to settle bad loans

Banks are preparing to make joint proposals for the settlement of bad mortgages (with write-offs of up to 50 percent) and bad consumer loans (up to 90 percent) to almost 157,000 debtors who have filed for protection under the provisions of the so-called Katseli Law.

The lenders aim to offer more favorable terms via the extrajudicial settlement than those that could be secured in court, so that they can reach a speedier arrangement for the loans.

This is the first time that local banks are making such a move collectively, and in each case the initiative will be led by the bank where the borrower owes the most. For example, if someone has a small debt stemming from a credit card or consumer loan to Eurobank as well as having taken out a large mortgage with National Bank, the latter will initiate proceedings with the debtor and, if possible, negotiate a settlement on...