BoG: NPLs to keep grow­ing dur­ing 2016

Kathimerini English - - Front Page - YIANNIS PAPADOYIANNIS

The Bank of Greece yes­ter­day is­sued a dra­matic call for im­me­di­ate ac­tion on tack­ling non­per­form­ing loans, stress­ing that any more lost time will have se­ri­ous con­se­quences on the real econ­omy and make the coun­try’s re­turn to sus­tain­able growth that much more dif­fi­cult. It warned, in short, that the scale of NPLs means the cri­sis may turn into a credit sec­tor cri­sis.

In a re­port on the state of the bank­ing sys­tem, the cen­tral bank re­vealed that in the first quar­ter of the year the qual­ity of the len­ders’ port­fo­lios de­te­ri­o­rated fur­ther, with the sum of bad loans climb­ing to 45.1 per­cent of all loans against 44.2 per­cent in De­cem­ber 2015 and 39.9 per­cent in De­cem­ber 2014.

Worse still, the BoG an­tic­i­pates a fur­ther in­crease in NPLs in the course of 2016. It says this is likely even in the case that over­all fi­nan­cial con­di­tions sta­bi­lize, as there is al­ways a sig­nif­i­cant time de­lay be­tween an eco­nomic rebound and the re­duc­tion of bad loans.

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