Hellenic Bank Association: Greek banks’ non-performing loans are falling

Greek banks’ non-performing loans are falling, a survey by Hellenic Bank Association said on Friday.

The report said that by September 2016, Greek banks succeeded in lowering the outstanding amount of non-performing loans (on and off balance sheet) to 107.6 billion euros (45.2 pct of total loan portfolio), from 108.4 billion euros in the previous quarter (June 2016).

Greek banks managed to significantly raise (by around 100,000) the number of rescheduled loans in the first half of 2016 and to adopt long-term solutions. More analytically, the rate of long-term debt rescheduling grew by around seven percentage points to 40.2 pct. The rate of final rescheduling solutions (6.3 pct) remained unchanged, along with the rate of loans – currently rescheduled – but remaining within the core of NPLs (70 pct). All these actions were part of business plan targets agreed in June 2016 in cooperation with the Bank of Greece and the European Central Bank.

The Association expects that Greek banks will have cut their non-performing loans rate by around 38 pct (40 billion euros) in the second half of 2016, through promoting long-term solution, selected loan write offs, collateral liquidation and loan sales.

In December 2007, non-performing loans were only 4.5 pct of total loans. In September 2016, Greek banks’ bad debt provisions totaled 57.1 billion euros on a consolidated basis.