Greek banking shares are down sharply amid investor fears over lenders’ needs to reduce their large stock of bad loans resulting from the financial crisis.
The index of bank stocks was down 10 percent in Athens on Wednesday. Piraeus Bank led the losses, at about 27 percent, after reports said it and the National Bank of Greece have pledged to reduce their bad loans more aggressively in coming years. Reducing bad loans can mean writing off assets and booking losses.
On average, over four out of ten loans issued by Greece’s banks are soured.
Greek banks needed to be propped up with money from Greece’s bailout loans since 2010. On Monday, the government lifted restrictions on bank withdrawals imposed in 2015. [AP]