The Bank of Greece governor is putting an end to rumors about the existence of triangular transactions between banks and servicers – companies that manage non-performing loans. Mr. Stournaras, responding recently to related questions in Parliament (at the DEKO committee which approved the renewal of his term), stated: “Triangular transactions do not exist and this is a myth. Banks are shareholders of these companies but do not consolidate the results and are prohibited by the supervisor from taking back loans and real estate. Therefore, this is an urban myth.”
He clarified that the funds that have purchased non-performing loans are investors, just like those who invest their capital in the stock exchange, therefore they cannot be placed under the supervision of the Bank of Greece for issues concerning their tax treatment and company headquarters. Conversely, servicers, which were created as subsidiaries of credit institutions, are based in Greece and supervised by the Bank of Greece. He reminded that the Bank of Greece has imposed total fines of 9.5 million euros for violations of their institutional framework.
Regarding the issue of repurchasing non-performing loans (through bonds resulting from securitizations), this came into focus following related questions submitted by shareholders of Cairo – the listed company that emerged from the eponymous securitization of Eurobank’s non-performing loans with the guarantee of the HERCULES program – to the Capital Market Commission and the Athens Stock Exchange.
From Cairo’s official response, it emerges that doValue, the servicer that has undertaken the management of the portfolio, retains the right to acquire the entire loan portfolio (Senior, Mezzanine and Junior securities) under specific conditions. For the acquisition to take place, the price must fully cover the preceding obligations, the outstanding balance of Series A Bonds (including interest), as well as the predetermined Exercise Price of Series B.
This development has caused reactions from some investors, who argue they invested in the stock believing the outstanding bond capital was 412 million euros and not just 42.9 million, according to independent appraiser calculations. Dissatisfaction peaked after the announcement of 2025 results, where the company showed accounting losses of 94.3 million due to massive impairment of its bond values.
Additionally, the right of early bond repayment is also acknowledged by Sunrise company (which emerged from the eponymous securitization of Piraeus Bank with the HERCULES guarantee). However, the related decision, as emphasized in a company announcement, requires an increased majority of 75% of bondholders.
