Non-performing loans falling in 2017 but banks need to review their plans, Bank of Greece reports
ΣΧΕΤΙΚΑ ΑΡΘΡΑ
Non-performing loans fell in 2017, credit risk is down compared with previous quarters, but a further decline will depend on developments in the country’s macro-economic data, the Bank of Greece said in a report released on Thursday.
The central bank, in its Report on the Financial System, asked Greek banks to review their business plans. The report noted that the NPLs rate fell to 43.1 pct at the end of 2017 from 44.8 pct a year earlier (222.1 billion euros from 237.5 billion), while NPLs fell to 95.7 billion euros from 106.3 billion reflecting increased write-offs worth 8.1 billion euros. The large enterprises portfolio (-19.2 pct) and the consumer portfolio (-19.7 pct) recorded the biggest percentage reductions in NPLs. The mortgage loan portfolio recorded a 0.4 pct increase in 2017.
The Bank of Greece noted that despite the fact that banks have taken initiatives for the active management of non-performing loans, such as restructurings, higher receipts, liquidations and selling of NPLs and have recorded significant progress in fulfilling their business goals and improved the quality of their portfolio, there was no room for complacency. Banks need to introduce a unified approach of debtors with multiple creditors, to find strategic defaulters and implement a final solution for non-viable enterprises. It noted that even if banks achieved fully their business goals by the end of 2019, the percentage of NPLs will remain a high 35.2 pct of their portfolios.
The central bank said resolving the problem required faster efforts, adding that banks would have to review their business plans emphasizing on developing new services and further reducing their operating costs.
Source: AMNA