By N. Malliara
[email protected]
Creation of a "bad bank", a long-standing proposal in the recession-battered country, has returned to the forefront over the recent period, given that Greece's systemic banks appear unable to implement a substantive reduction of corporate non-performing loans (NPLs).
Outstanding loans extended to all forms of business entities by Greek lenders, as last recorded over the first nine-month period of 2017, reached 135.6 billion euros, or some 60.2 percent of the total credit extended by the country's commercial banks.
Of that total, however, 43.6 percent are loans that are not being serviced
Specifically, 19.7 percent of total credit extended to the business sector involves retailers and wholesalers, with the level of non-performing exposures (NPEs) in this sector higher than the average, 57.6 percent as opposed to 43.6 percent of total business loans not being serviced.
The highest figure for NPEs is found in the food & beverage sector (77.9 percent), followed by the farm sector, 56.4 percent.
According to recent reports, the ECB and the EU Commission have concluded that the best way to tackle NPLs in Greece is the creation of a Greek "bad bank", a national option instead of the rejected proposal for a pan-European "bad bank".
