Pandemic’s bad loans seen at just €5 bln
Greek banks estimate that the new nonperforming loans to arise as a legacy of the financial crisis of the pandemic will come to some 5 billion euros, against previous fears that the new batch of bad loans could reach €10 billion.
This is according to the NPL reduction plans that the country’s four systemic banks submitted to the European Central Bank’s Single Supervisory Mechanism at end-September. They include forecasts for the reduction of nonperforming exposures (NPEs) to 20% of all their credit by end-2022, from 40% at end-2019 and the average level of 36.6% during this year’s first half.
The plans submitted will be adjusted in March 2021, when the effects of the new economic crisis will be clearer and the European Banking Authority (EBA) will have issued clear guidelines on the management of the bad loans the pandemic will leave in its wake. The repayment moratoriums banks have applied this year concern debts of €25 billion.
