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Greek Banks Face ‘Gangs’ in Bad-Loans Battle With Defaulters

Sotiris Nikas, Christos Ziotis, Stefania Spezzati, (2017), “Greek Banks Face ‘Gangs’ in Bad-Loans Battle With Defaulters”, Bloomberg, 19 October

When Eurobank Ergasias SA, Greece’s third-biggest lender, recently went after a “strategic defaulter,” angry protesters stormed the courtroom to block its foreclosure attempt. The defaulter, whose name the lender won’t disclose, had not serviced its loans for the last five years and owed the bank 4.85 million euros ($5.7 million). Over the same period, it had collected about 6 million euros in dividends from its 41 percent holding in a food company, showing, according to the bank, that it could honor its commitments. The case is among thousands Eurobank and other Greek lenders are contending with as they try to accelerate efforts to shrink bad loans, fearing they’ll need to raise more capital if they don’t.

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