Where and how many loans the National Bank will give in 2022

Of Leonida Stergiou

In order to accelerate the positive credit expansion, the National Bank has revised the target for new loan disbursements in 2022 by 1 billion euros, compared to 2021.

According to the strategic plan of the Bank, the new loans will exceed 5 billion euros per year by 2023. The goal is to achieve a share of more than 30% in loans from the Recovery Fund.

Of the new disbursements of 5 billion euros, 3 billion euros are expected to relate to business loans to large and medium-sized enterprises. This amount is estimated to correspond to a net credit expansion to businesses of around 1 billion euros.

The remaining 2 billion euros of the new loans will relate mainly to retail banking with the largest percentage boosting mortgage credit, where the balance is expected to increase to around 300 million euros.

However, the National Bank is going to place more emphasis on consumer and personal loans this year, while maintaining its presence in the financing of small and medium-sized enterprises.

Ethniki’s strategy includes funding to modernize its clientele, with the aim of extroversion and digital transformation, while it will continue to fund sectors such as energy (green energy) and technology and innovation companies.

Moreover, the National Bank’s presentations show that over time, 60% of the stock of serviced loans corresponds to business loans, approximately 25% to mortgages and the rest is divided almost between consumer credit and small business loans.

In 2021, when the EIB was the only one with a net credit expansion of 2.8 billion in the nine months, € 2 billion came from corporate loans and the remaining € 800 million from retail banking.

Of course, like all banks, the National Bank is going to turn to retail banking as there is more room for growth and interest rate margin. In business, Co-financing from the Recovery Fund and competition between credit institutions limits both disbursements and interest rate gains.

For example, net savings in business credit in 2020 had risen to 6.5 billion euros, in 2021 to about 4 billion euros, while in 2022 it is expected to range between 3.5 and 4 billion euros.

As far as the Recovery Fund is concerned, the disbursements will depend on the funds that will enter Greece by the end of the year, which so far are estimated at 1.5 billion euros.

Most of them are subsidies, as the loans reach around 900 million euros, which will mobilize investments around 1.5 billion euros and will require bank loans of 500 million euros. Of these, the National Bank, like the other systemic ones, will claim shares from 25% to 30%.

However, investment funds and financing needs are also created by the part of investments that is estimated for 2022 around 240-250 million euros.

At the same time, the new development law and other co-financed programs create new financing needs for the economy as a whole, including consumer and housing credit. Indicatively, by 2026, the economic cycle together with the Recovery Fund will create additional financing needs around 15 billion euros by 2026.

For this year, given the start with the first disbursements from the Recovery Fund and the implementation of investment plans that were frozen from 2020 until mid-2021, it is estimated that the total business credit this year will amount, in terms of net credit expansion, to 3 , 3-4 billion euros. This for the National Bank is estimated at a net disbursement of around 800 million with 1 billion euros