By A. Doga
[email protected]
Greece’s systemic banks are battling on at least four “fronts” in their efforts to reduce non-performing loans, a massive problem for the country’s crisis-battered banking sector. The ongoing efforts come at a particularly volatile time for the Greek economy, given that a second review of the third bailout and a reformed legal framework for outstanding loans is still pending.
Bank executives have called for an immediate conclusion to the second review, in via negotiations with creditors, as well as the drafting of a new framework for ratification by Parliament.
Despite the positive results in the banking sector for 2016, the first two months of 2017 have shown recorded increased difficulty by borrowers to pay arrears and to remain in loan restructuring programs.
Another large bloc of borrowers is reportedly avoiding coming to terms with creditors, as the former expect an out-of-court settlement process to present more favorable prospects.
At the same time, auctions of foreclosed property have been frozen, with a vote to allow electronic auctions also delayed.
Finally, crisis-plagued Greece still lacks a secondary market for loans, with only one distress management company issued a license so far.
As such, Greece’s four systemic banks have only the “write-off” option with which to lower NPLs and NPEs, given that the target for 2017 is to slash the Olympus-sized “mountain” of debt by 7.6 billion euros.
