Banks setting higher goal for NPE reduction
Greek banks’ business plans provide for a greater reduction to non-performing exposures (NPEs) than what has been agreed with the European Central Bank’s Single Supervisory Mechanism (SSM) in an effort to illustrate to monitors their resolve in tackling the problem in a dynamic manner.
Sources say that talks are under way between the SSM and the Bank of Greece with domestic lenders for a revision of the bad-loan reduction plans. The adjusted plans will include changes to the final targets – banks stress they can cut bad loans by an additional 3 billion euros – and to the mix of means to be employed, with the liquidation of assets through online foreclosures – a key element.
Those consultations are in their final stage and the revised targets on NPE reduction should be agreed for 2018 and 2019 by early November. Banks say that by end-2019 they will have brought their NPEs down to 63.7 billion euros in total, against an original target for 66.7 billion.
Bank officials say that by June 2017, NPE reduction beat its target by 1.6 billion euros with their sum dropping to 101.8 billion euros. The difference is set to grow further in the current half of the year and in 2018.
