The Bank of Greece (BoG) has emphasized the importance of effective loan management for significant credit institutions. According to the Bank’s Annual Report on Preventive Supervision and Recovery Activities for 2024, during the period 2025–2027, the main focus will be on managing overdue loans, both in early stages and through restructuring processes.
The significance of this issue is heightened by an environment of uncertainty, where economic slowdowns and gradual interest rate reductions could compress operational profit margins and negatively impact asset quality.
Supervisory priorities for 2025–2027 are centered around three key pillars:
1. **Business Model**: Emphasis on strategy evaluation, revenue diversification, and progress in digital transformation.
2. **Internal Governance**: Strengthening supervision mechanisms, Internal Audit Functions, and risk management based on BCBS 239 principles.
3. **Credit Risk**: Focusing on further reduction of non-performing exposures, efficient handling of assets from foreclosures, and ensuring new lending complies with regulatory frameworks.
Cybersecurity risk mitigation also remains a priority, through investments in information infrastructure and vendor relationship management.
For smaller banks (Less Significant Institutions), BoG’s supervisory priorities include four areas: credit risk management, business model and capital plan assessments, internal governance focusing on Audit Committees and Boards of Directors, and technological risks aligned with DORA regulations.
Additionally, the Bank outlined supervisory goals for loan management companies, emphasizing corporate governance enhancement, service quality improvement, and better handling of borrower complaints and claims.
Insurance companies will also be under close supervision due to recent acquisition trends by banks. The BoG will focus on how these firms price services and manage reinsurance practices.
Special preparations are underway for the adoption of the revised Solvency II framework, while climate-related risks and cybersecurity remain central concerns.