Greek Katseli law adds €55.5 million cost to major banks

A new Greek legislation, known as the Katseli law, changes the method for calculating interest on active loan restructurings that are under protection. The Supreme Court ruling now requires interest to be applied only to the monthly instalment and for the period between two payments, rather than on the total outstanding principal. The retroactive application of this rule has imposed a cumulative burden of €55.5 million on the four systemic banks in the second quarter.

The National Bank of Greece records the largest impact at €25 million, followed by Piraeus Bank with €15 million (including €9 million derecognition loss), Alpha Bank with €13 million, and Eurobank with about €2.5 million. The change reduces future cash‑flow recoveries and shortens some loan repayment periods. Excess interest previously collected will be transferred to the state‑guarantee scheme “Heracles”. The law may face legal challenges in the Council of State.