BUSINESS

Credit sector to turn all attention to NPLs

YIANNIS PAPADOYIANNIS

TAGS: Banking

The country’s systemic banks will need to pick up their pace in tackling nonperforming loans after the announcement of the stress test results, expected on Saturday.

Credit sector officials tell Kathimerini that the exercise’s positive results may banish fears of a forced share capital increase – with grave consequences on stakeholders and the stock market – but the rate by which NPLs are lowered in the next 12 months will determine whether banks will require any additional funds in the medium term.

Managers are optimistic that no extra capital will be needed, noting the positive results in lowering NPLs – with the fourth quarter of 2017 being the best in that direction since the outbreak of the crisis – and the general improvement in the economy.

Besides NPLs, bank managers are prioritizing the full return of funds drawn from the emergency liquidity assistance (ELA) mechanism, the strengthening of the deposit base, as well as the issue of loans to selected enterprises and business plans.

Bankers are also keeping an eye on the European Central Bank’s waiver of the rule that forbids the acceptance of bonds in return for cheap liquidity, which Greek banks could lose once the bailout program ends in August.

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