Greece's four systemic banks are expected to commence a more-or-less automated process to sell-off "bad loan" portfolios in the coming period, within the framework of a "calendar effect" agreed to since last April.
The process envisions that if new loans stopped being serviced and are not covered by new collateral, then after two years the credit institution that has allocated the loan must seek provisions for the total sum lent.
In terms of outstanding loans with guarantees, the "grace period" before mandatory provisions for NPLs increases to seven years.
In terms of the Greek banking sector, estimates are that another five billion euros worth of NPLs will be sold off to distress funds by the end of the year, mainly "bad debt" entailed in consumer and business loan portfolios, with or without guarantees.
