ECONOMY

Banks bracing for more losses

Greek banks will continue to register losses for this and next year, Moody?s warned in a report published on Thursday, highlighting the particularly negative outlook for the local credit system.

The international rating agency attributed the negative prospects to the further deterioration of macroeconomic conditions, which will continue to weaken the capital base, cash flow, earnings and the quality of banks? assets.

Poor financial conditions will therefore have a direct impact on banking operations, resulting in losses both for 2012 and 2013, the report suggested, taking into account forecasts for a 7-percent recession this year.

Local bank officials stress that besides liquidity problems, lenders have been facing an uncontrollable increase in non-performing loans, which they say are near the 20-percent mark. In the last three-and-a-half years provisions have quadrupled, corresponding to 50 billion euros of bad loans — a historic high for the domestic credit system.