Securitization of nonperforming exposures is the key instrument for Greek banks in their campaign to attain their targets for NPE reduction, Deutsche Bank says in a report on bad loans in the European credit sector.
The German bank notes that the continent’s lenders with bad-loan ratios above 5 percent (including the Greek ones) have managed to reduce their NPEs by 60 percent on average since late 2015, against just 16 percent for the banks with a rate below 5 percent, while bad-loan sales are expected to accelerate in the fourth quarter of the year.
The report highlights in particular that Greek banks have slashed their bad loans by 34 percent since end-2015, taking their rate to 48 percent. National has achieved the biggest reduction, both since the start of the year (25 percent) and since end-2015 (50 percent). Alpha has posted respective reductions of 13 percent and 30 percent, while Piraeus has recorded respective cuts of 6 percent and 30 percent in its bad-loan stockpile.
Deutsche says that, in the third quarter of the year, Greek banks reduced their NPEs by 6 percent on a quarterly basis and 17 percent annually.