First details of revised targets for reducing Greek banks' NPLs emerge

Friday, 19 October 2018 11:55

By E. Sakellari

Greek banks and Single Supervisory Mechanism (SSM) have reportedly agreed over new targets to lower "bad debt" held by the former, with initial reports pointing to a goal of slicing no less than 50 billion euros of non-performing loans from banks' balance sheets up until December 2021.

Reaching such an ambitious target would leave 38 billion euros in terms of NPLs, i.e. a  43-percent reduction, given that NPLs in June 2018 were calculated at 88 billion euros.

Based on the same reports, "bad debt" held by Greece's four systemic banks by 2021 should not exceed 18 percent of their total loan portfolios.

Details over the recent revisions in dealing with the Olympus-sized "mountain" of bad debt held by Greece's banks will, by all accounts, be announced in tandem with forthcoming third quarter 2018 results.

Greek banks reportedly aim to achieve a 40- to 50-percent reduction in NPLs through sales of bad debt portfolios to distress funds and securitization; another 25 percent from liquidations and the rest through refinancing - with the exact details and fixed percentages remaining to be officially announced.

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