New NPLs in Jan-Feb put at 2 billion euros
After several months of decline in the local credit sector’s creation rate of new bad loans, banks are reporting a sudden rebound in the growth rate in January and February 2015.
Estimates by bankers put the amount of new nonperforming loans created in the first couple of months of the year as high as 2 billion euros, which is twice the amount of new NPLs created in the last couple of months of 2014.
This comes as local banks are set to suffer an extra burden adding up to some 1 billion euros from the rise in the cost of liquidity owing to the shift of their funding from the European Central Bank to the emergency liquidity assistance (ELA) mechanism of the Bank of Greece: The former lends cash at an interest rate of 0.05 percent while the latter supplies cash to Greek banks at a rate of 1.55 percent.
