Greek lender Eurobank, one of four systemic banks in the country, on Wednesday pointed to a pressing need for an improvement in the domestic economic environment in order to reduce non-performing loans, an explosive credit problem in the country and an issue repeatedly taken up in now delayed negotiations with institutional creditors.
Greek lender Eurobank, one of four systemic banks in the country, on Wednesday pointed to a pressing need for an improvement in the domestic economic environment in order to reduce non-performing loans, an explosive credit problem in the country and an issue repeatedly taken up in now delayed negotiations with institutional creditors.
In a special report, Eurobank says an economic upturn in the recession-plagued country depends on a rapid completion of negotiations between Athens and its lenders, the so-called “Quartet”, towards a first review of the Greek program (third bailout).
In the mid-term, the report called for a further improvement in the institutional, legal and regulatory management of NPLs, in order to free up credit resources now ensnared in unproductive sectors of the Greek economy, credit and capital that can be then funneled back to households and healthy businesses.
According to Eurobank’s analysts, the sharp rise in NPLs in Greece from 2008 onwards is primarily due to the unprecedented economic crisis in the country, rather than to loose lending practices followed by the Greek lenders. Eurobank said this development was the exception to the banking situation in the European south.