The gradual increase of economic activity and reduction of unemployment in Greece, combined with sales of NPEs and cancellations of outstanding debt will gradually decrease outstanding loans at banks in the next 18 months, Moody’s credit agency said in a report on the four systemic banks in Greece.
According to Moody’s, Eurobank and National Bank are best positioned to meet the targets of reducing their exposure to NPLs, compared to Alpha Bank and Piraeus Bank.
It added that capital levels will slightly drop at the four banks between 2019 and 2020 because of stricter demands for forecasts related to losses from loans, on the basis of the IFRS 9 accounting models. Alpha Bank has the strongest capital base among all four systemic banks, with the lowest level of deferred tax credits.
The large NPE will continue to create risks in the banks’ capital adequacy, it said.