BUSINESS

NPL reduction target is set for a revision

EVGENIA TZORTZI

TAGS: Banking

Greek banks’ 2020 reduction target for nonperforming loans is about to be revised, due to the extraordinary conditions and the major uncertainty caused by the coronavirus epidemic, Bank of Greece Governor Yannis Stournaras noted in a report published on Friday.

Stournaras noted that the unprecedented conditions under which the credit system and the real economy are operating will have a negative effect on the effort to achieve the NPL target in the coming period, though not the final target for end-2021.

The banks’ target is for nonperforming exposures (NPEs) to drop below 20 percent by December 2021, and Stournaras wrote that this goal remains in place despite the revision to take place for this year.

Banks reduced their NPEs by 13.8 billion euros over the course of last year, compared to end-December 2018, taking their sum to 68 billion, or 40.3 percent of all loans, against a European Union average rate of 3.4 percent at end-September 2019. Greek banks’ NPEs had peaked at 107.2 billion euros in March 2016.

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