By A. Doga
The Bank of Greece (BoG) this week warned that only three out of 100 (3 percent) restructured loans remain serviced afterwards, just one of several indices presented by the central bank to point to the massive problem entailed in reducing and managing the Olympus-sized “mountain” of debt entailed in non-performing loans (NPLs) in the country.
As “N” has previously reported, pressure by the ECB’s Single Supervisory Mechanism (SSM) means that 2017 will serve as a landmark for Greece’s systemic banks to reduce NPLs, in terms of number and especially in absolute value. The package of measures entailed to achieve bench-marked goals includes long-term restructuring, liquidation, sell-off of “bad debt” portfolios to distress funds and even write-offs.
The goal for 2018, in fact, is to reduce non-performing exposures (NPEs) by 7.6 billion euros.
Currently, the so-called cure rate is hovering at a disappointing 2.6 percent, although the positive result over the first half of 2016 is the fact that the former rate is higher than the default rate which stood at 2.4 percent, as opposed to 3.5 percent at the of 2015.
Along those lines, BoG Gov. and former finance minister Yannis Stournaras was quoted by FT on Monday as threatening fines against banks that fail to meet NPL targets.
