Last Update: 12:33
Greek banks made progress in tackling bad loans in the first quarter, according to Bank of Greece data released on Tuesday.
However, nonperforming corporate, housing and consumer loans accumulating during the crisis year continue to account for more than half of the banking sector’s overall loan book.
Since the onset of the economic crisis, Greek banks faced a steadily increasing number of non-performing exposures (NPEs), comprising non-performing loans (NPLs) and restructured loans likely to turn bad.
Specifically, in 2008 NPEs amounted to 14.5 billion euros, or 5.5 percent of loans. However, at the end of June 2016, NPEs soared to 106.9 billion or 50.5 percent of loans.
In the first quarter of 2017, the amount was trimmed to 103.9 billion euros, giving banks some room to breathe because the target for the first three months of the year was to bring the figure down to 105.2 billion.
The NPE ratio was on target at 50.6 percent, while NPLs — loans past due for more than 90 days — banks missed the target as the rate came to 36.7 percent instead of the targeted 36.05 percent.
The aim of Greek banks is to reduce bad debt significantly in the next three years. The target is to cut NPEs to 66.7 billion euros (or 33.9 percent of their loan books) by 2019 from 106.9 billion euros last September, when the targets were agreed.
Also, they aim to reduce their NPL rate to 20.4 percent by December 2019 from 37 percent in September 2016.