Greek Banks’ NPLs Falling

Greek banks’ non-performing loans are falling, a survey by Hellenic Bank Association said. 

The report said that by September 2016, Greek banks succeeded in lowering the outstanding amount of non-performing loans (on and off balance sheet) to €107.6 billion ($116.05 billion), 45.2% of total loan portfolio, from €108.4 billion in the previous quarter (June 2016), TornosNews reported.

Greek banks managed to significantly raise (by around 100,000) the number of rescheduled loans in the first half of 2016 and to adopt long-term solutions. More analytically, the rate of long-term debt rescheduling grew by around seven percentage points to 40.2%. The rate of final rescheduling solutions (6.3%) remained unchanged, along with the rate of loans currently rescheduled–but remaining within the core of NPLs (70%). 

All these actions were part of business plan targets agreed in June 2016 in cooperation with the Bank of Greece and the European Central Bank. 

The Association expects that Greek banks will have cut their non-performing loans rate by around 38% (€40 billion) in the second half of 2016, through promoting long-term solution, selected loan write offs, collateral liquidation and loan sales.

In December 2007, non-performing loans were only 4.5% of total loans. In September 2016, Greek banks’ bad debt provisions totaled €57.1 billion on a consolidated basis.

According to the figures supplied by HBA, between December 2007 to the end of 2016, the number of credit institutions of all types active in the country dropped from 64 to 39, with all foreign banks terminating their retail operation, except for HSBC.