Greek banks are preparing to reduce their nonperforming loans at a more aggressive rate. Sources say that the revised plans the lenders will submit this fall will contain targets above the 10-15 percent reduction – or some 10 billion euros – that the existing plans provide for.
The current targets for cutting bad loans from the bank’s financial reports see nonperforming exposures dropping to 64.6 billion euros by the end of 2019, from 92.4 billion euros in March 2018. At the same time NPLs will have to drop from 63.9 billion at end-March to 38.6 billion by end-2019.
The revised plans for the reduction of NPEs by the end of next year will target a figure significantly below 60 billion euros, while NPLs are seen dropping to less than 35 billion.
The plan change, with the adoption of more ambitious targets, is the second to take place, so that the banks’ financial reports are eased faster. The revision is taking place with the active encouragement of the Bank of Greece and the Single Supervisory Mechanism (SSM), and bank managers acknowledge that restoring confidence and returning to normality cannot be achieved with such a high stock of NPEs.