The Bank of Greece (BoG) this week revisited the still unresolved and pressing issue of non-performing loans (NPLs) in the country, referring to a continuing deterioration of Greek banks’ loan portfolios.
The Bank of Greece (BoG) this week revisited the still unresolved and pressing issue of non-performing loans (NPLs) in the country, referring to a continuing deterioration of Greek banks’ loan portfolios.
In its regular six-month report, the central bank said the percentage of NPLs held by Greece’s systemic banks in the first quarter of 2016 reached a stratospheric 45.1 percent, despite concerted efforts to stem the tide.
In terms of specific categories, the BoG said the consumer loan portfolio shows NPLs reaching 55.2 percent, up marginally 0.2 percent since the end of 2015. Nevertheless, the fact that more than one in two such loan products is now characterized as a NPL bodes ill for banks’ spreadsheets and liquidity in the market as a whole. As an absolute number, some 2.14 million such loan contracts are considered as NPLs.
In terms of corporate and commercial lending, the NPL index reached 44.6 percent, up from 43.8 percent at the end of 2015. Of approximately 749,000 such loan portfolios, 425,000 are considered as not serviced.
In terms of mortgages, the NPL index reached 42 percent, up from 41 percent at the end of 2015. In total, 1.359 million mortgages and housing-related loan products are recorded, of which more than 482,000 are now NPLs.
In terms of value, NPLs in Greece easily exceed 80 billion euros, with some estimates reaching as high as 110 million euros.
The issue has repeatedly been brought up by Greece's institutional creditors, who demand a significant decrease in the figure.