ECONOMY

Banks write off old debts worth billions

The country’s four main banks were forced to write off old and expired debts of more than 2.5 billion euros last year in an effort to clean up their financial accounts, abandoning expected revenues whose collection they deemed unlikely.

According to figures from Alpha, Piraeus and Eurobank, the three systemic lenders wrote off nonperforming loans adding up to more than 2.3 billion euros, up from just 504 million euros in 2013. The Piraeus Group wrote off bad loans of 1.01 billion euros last year, Alpha crossed out 931 million euros and Eurobank discarded demands worth 382 million euros.

Bank officials told Kathimerini that the aforementioned were loans that lenders cannot expect to collect anymore, while the strong capital position of banks and the improvement in profits and liquidity last year allowed them to act in a more dynamic fashion in terms of cleaning up their financial reports.

Credit sector sources estimate that the sum of bad loans, officially at 72 billion euros at end-September 2014, has now grown to over 75 billion euros as the situation deteriorated in the last quarter of 2014 and the first of 2015. That was not only due to the extended political and economic uncertainty, but also to the expectations of a favorable law regarding debt settlement.