The Managing Director of the HFSF, Elias Xirouhakis, spoke in Parliament in the context of the discussion of the bill for the restructuring of the Growth Fund, where, among other things, he mentioned that Greek taxpayers benefited €3.5 billion from bank recapitalization. 

ELIAS XIROUCHAKIS SPEECH

"From the establishment of the HFSF in 2010 until today, we have worked tirelessly, initially acting as a rescue vehicle, covering the 14.4 billion funding gap of institutions assessed as unsustainable by the supervisory authority, which were "broken" and then absorbed by the systemic banks (12 in total, including, I remind you, important banks of the past such as Agrotiki, Postal Savings Bank, etc.).

At the same time, we recapitalised and restructured the systemic banks, injecting a total of €31.8 billion in capital injections. Subsequently, and in the next phase of our mission, we adopted a policy of "stewardship" as a responsible shareholder in the public interest, through which we contributed to the continuation of the smooth financing of the economy and the protection of deposits. During this stage, i.e. from 2018 onwards, we strengthened, as an active shareholder of the banks, with our significant interventions, the structures of corporate governance and risk management, pioneered the process that led to the drastic reduction of Non-performing Loans (NPLs), made investments of a developmental nature to avoid impairment of the value of our holdings. Finally, we contributed to the transformation, and ultimately to the return to operational profitability of the Greek systemic banks, making them particularly attractive investment destinations.

With the amendment of the Fund's law in June 2022, our corporate purpose and objective, in addition to financial stability, was the return of the banks to the private economy within a specific timeframe, with a deadline of the end of 2025. In this context, we made from the fourth quarter of 2023 to the first quarter of 2024 a full disposal of our holdings in 3 of the 4 systemic banks, and a partial divestment of the fourth one, namely National Bank, taking advantage of the extremely favourable conditions in the international markets, as well as the very positive macroeconomic and microeconomic environment in our country, for the successful disposal of our holdings.

It is worth pointing out that the reduction of the non-performing loans (NPLs) and the return of banks to the private sector were two of the main conditions set by international credit rating agencies for the recovery of the investment grade rating of the Hellenic Republic. The return to investment grade led to a reduction in the cost of borrowing and enhanced the country's investment profile. The contribution of the HFSF was undoubtedly a catalyst for the achievement of both of these conditions. It should be noted here that the peak of NPLs reached a staggering €107.2 billion in March 2016, while in March 2024 the corresponding amount was only €11.1 billion. , marking a staggering reduction of €96.1 billion. In the same period, it is estimated that the total value of the debt will fall by €96.1 billion, or around 90%.

In this context, one of our leading (perhaps the leading) initiatives was the HFSF's study and detailed proposal to the Ministry of Finance in 2018 for the creation of the asset protection system with state guarantees, on which the plan subsequently named "Hercules" was based.

The plan provided for the securitization of non-performing loans with the partial guarantee of the Hellenic Republic. In total, the Hercules Plan allowed Greek systemic banks to reduce their NPLs by about €51 billion, or 53% of the total reduction (€96.1 billion) in NPLs since their peak. As a result, the Greek banking system's NPL ratio fell from an unprecedented 49.1% (i.e., 1 in 2 loans in the red) in September 2016, which was its peak, to 7.5% in Mar. 2024. However, I want to stress that the many important actions of the HFSF (which I do not have the time to detail today), in addition to the Hercules project, contributed decisively to the overall reduction of NPLs." Μr. Xirouchakis said among other things.