By A. Doga
Non-performing exposures (NPEs) continue to attract the undiminished interest and concern of the Bank of Greece (BoG), which last week announced a stabilization in the sector and even a reduction in NPEs’ total value, in absolute terms.
Nevertheless, the BoG continues to consider the problem as the biggest challenge facing Greece’s banking sector.
Recently, the BoG has begun to target so-called “strategic defaulters”, a category that reportedly includes one in six businesses in the country. The latter are usually active in the construction sector and real estate market, with industrial units, IT and communications enterprises and even service companies included.
According to the central bank’s data, medium-sized companies, which most of the time are profit-making, appear to have the highest probability of becoming strategic defaulters.
The BoG’s interim report on monetary policy, which was unveiled last week, NPEs held by businesses were 10 percent of the total in 2010, but skyrocketed to 31 percent by the end of 2015.
At the end of the second half of 2016, businesses with non-performing exposures reached 44.7 percent of the total.
