Bank of Greece (BoG) governor Yannis Stournaras on Tuesday announced a coming law to allow for the equitization of non-performing loans (NPLs) in the country, speaking before members of a relevant Parliament committee probing the issue of bank lending to political parties and mass media.
Bank of Greece (BoG) governor Yannis Stournaras on Tuesday announced a coming law to allow for the equitization of non-performing loans (NPLs) in the country, speaking before members of a relevant Parliament committee probing the issue of bank lending to political parties and mass media.
Moreover, Stournaras, a former finance minister, said the level of NPLs in the country has now reached 240 billion euros, of which 108 billion euros worth of loans (45 percent) are considered as not being serviced.
He said that 41.8 percent of the total is mortgages; 55.3 are consumer loans, with the remainder considered business and corporate lending.
Referring to a plan for an equitization of NPLs, he said Greece's institutional creditors are not negative to the prospect, explaining that the move would involve companies where a majority of shareholders are deemed as “non-cooperative”.
In case a shareholder refuses to participate in a share capital increase to continue to finance a business holding a NPL, a equitization of the latter will implemented, allowing for a new shareholder to enter -- one or more selected by banks holding the NPL.