BoG puts pressure on banks over bad loans

The Bank of Greece has called on commercial lenders’ managers to display more resolve and progress on the crucial front of nonperforming loans, as figures for the first quarter of the year were far from encouraging.

Sources say that the Bank of Greece told the country’s systemic banks in a series of contacts that the performance of the January-March period regarding the reduction of NPLs and nonperforming exposures (which include restructured loans) was not satisfactory even though banks wrote off a significant number of bad loans from their portfolios.

The nonperforming loans forgiven in the first three months amounted to 60 percent of write-offs scheduled for the entire year.

Furthermore, the start of 2017 saw banks lose their cushion created in late 2016 through their good performance in NPL reduction over the second half of last year.

Therefore the central bank is asking for acceleration and more decisive moves on the difficult fronts: efficient restructurings, collections from the collateral liquidation, and sales of bad loans to third parties. According to plans, some 64 percent of the reduction ought to come from such measures, and 36 percent from write-offs.

Source: ekathimerini.gr