Greek banks face 60 million euro burden from Supreme Court ruling

Greek banks are required to set aside more than 60 million euros in provisions following a Supreme Court decision regarding interest rate calculations for loans under the Katseli Law. The ruling mandates that interest be calculated based on the monthly installment, a change that limits future cash flows from this loan category by resulting in lower interest charges and, in some instances, shorter repayment periods.

The financial impact extends beyond loans currently held on bank balance sheets. For securitized portfolios, banks are expected to refund funds that received excess interest due to the previous calculation method. Additionally, excess interest collected prior to the transfer of these loans to the Hercules program securitizations is expected to be returned to the state guarantee scheme to cover the obligations created by the court's decision. These provisions were already reflected in the second-quarter financial results.