Luxembourg, 25 July 2024
- A new €700 million envelope of guarantees for Greece’s four systemic banks will cover €1.4 billion in fresh financing for mid-caps at favourable terms
- Alpha Bank (€200m), National Bank of Greece (€100m), Eurobank (€200m) and Piraeus (€200m) all sign up for the new scheme
- By covering credit losses and providing capital relief on guaranteed assets, the programme aims at stimulating risk appetite and making room for new lending to Greek businesses
The European Investment Bank (EIB) and Greece’s four systemic banks have agreed a new collaboration in the form of a €700m guarantee programme to support mid-caps in Greece. More specifically, the EIB has committed to cover on a loan-by-loan basis 50% of any losses that may incur in portfolios of €1.4 billion worth of new financing to be granted by the four participating banks, Alpha Bank, National Bank of Greece, Eurobank and Piraeus.
As a result, eligible businesses with between 250 and 3,000 employees will be able to get loans at favourable terms through the four banks to finance their working capital needs and investments, which are vital for their sustainability and competitiveness.
These new agreements, which are part of the EIB’s EU-wide linked risk-sharing (LRS) programme, are expected to mobilise a total of almost €2 billion worth of fresh financing to eligible mid-caps across the country, when taking into account own and third-party resources that are expected to be raised.
On Wednesday, July 24 in Athens, EIB Vice-President Yannis Tsakiris, and the representatives of the four systemic banks inaugurated the new programme and highlighted the impact of their partnership in supporting the real economy in Greece, enhancing its competitiveness, fostering job security and job creation.
“We have been working consistently with Greece’s four systemic banks to support the country’s real economy with financing and guarantee agreements like this, which give greater access to credit and more favourable financing terms for medium-sized businesses. Access to liquidity remains equally important for Greek businesses in order to strengthen their competitiveness, given the current situation of increased interest rates,” said EIB Vice-President Yannis Tsakiris.
“Our leading position in the Greek business landscape, with 65% of small and medium-sized enterprises maintaining an active funding relationship with Alpha Bank, places an even more significant responsibility on us to help our clients in improving their sustainability and resilience. The new partnership with the EIB strengthens our ability to meet this responsibility, as the EIB program expands the options available to support Greek medium-sized enterprises by offering favourable terms for financing their capital needs and investment projects that improve their competitiveness, thus contributing to their growth, while it also fosters job creation,” said Yannis Emiris, General Manager of Wholesale Banking at Alpha Bank.
“The support of medium-sized enterprises is an ongoing priority for National Bank of Greece (NBG), while through its long-term cooperation with the European Investment Bank (EIB), NBG has provided loans of more than €3 billion. In this context, it is important that we are expanding our successful cooperation with the EIB with a new guarantee program which will enable financing with favourable terms to even more companies throughout Greece,” stated Vassilis Karamouzis, General Manager of Corporate and Investment Banking of National Bank of Greece.
Panagiotis Lymperopoulos, Eurobank’s General Manager, Head of Large Corporate & Loan Syndications, said: “Eurobank consistently supports entrepreneurship over time, with a view to the stable and continuous growth of the Greek economy. With the participation in the new guarantee programme of the European Investment Bank, which proves once again the strong cooperation between EIB and Eurobank, we are taking another important step, to support healthy business across its entire range, contributing significantly to the modernisation of the Greek production model and the establishment of sustainable growth that will last over time.”
“The EIB Group has been a significant and prominent partner for Piraeus. Through our seamless cooperation we have released numerous funding tools that assisted Greek businesses investments, competitiveness and job creation, creating a lending portfolio exceeding €5bn. Piraeus, appreciating its cooperation with EIB and the remarkable results, takes pride in participating in the EIB LRS programme – a programme that will provide necessary funding for the support of the real economy,” stated Theodore Tzouros, Executive General Manager, Chief Corporate & Investment Banking of Piraeus.
Guarantees play a crucial role in the lending process, since by covering possible credit losses and providing capital relief on guaranteed assets, they can contribute to stimulating risk appetite and creating additional lending capacity at financial institutions for the ultimate benefit of Greek businesses.
This latest round of agreements reinforces the EIB’s role as a major backer of businesses of all sizes in Greece. It follows the successful implementation of the guarantees deployed in 2022 under the European Guarantee Fund (EGF).
Through its strong partnerships with the banking sector and with the use of modern and innovative financial instruments, the EIB is committed to helping businesses overcome investment barriers and ensuring that the projects it finances are the most suitable to address market failures and alleviate investment gaps.
About the EIB
The European Investment Bank (EIB) is the long-term lending institution of the European Union, owned by its Member States. It finances sound investments that further EU policy objectives. EIB projects bolster competitiveness, drive innovation, promote sustainable development, enhance social and territorial cohesion, and support a just and swift transition to climate neutrality.
The European Investment Bank Group (EIB Group), consisting of the European Investment Bank (EIB) and the European Investment Fund (EIF), reported total financing signatures in Greece of €2.5 billion in 2023, 36% of which went to supporting financing for SMEs and mid-caps. Overall, the EIB Group signed €88 billion in new financing in 2023.
Source – EIB