BoG: Write-offs kept NPEs in check over Q1 2017; figure stands at 103.9 bln€

7 June 2017
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Uncertainty in tandem with expected benefits from the looming implementation of an out-of-court settlement framework for outstanding bank loans – itself a memorandum-mandated prior action – apparently increased the mountain of “bad debt” held by Greece’s systemic banks in the first quarter of 2017.

Nevertheless, based on the figures released on Tuesday by the Bank of Greece (BoG), write-offs kept the balance of non-performing exposures (NPEs) at even levels.

NPEs reached 103.9 billion euros at the end of March, some 1.4 billion euros lower than the target. Non-performing loans (NPLs) stood at 75.2 billion euros, 500 million euros higher than the target, the BoG said.

All eyes are now on the second half of the year in Greece, in terms of NPEs and NPLs, given that liquidations are expected to be accelerated due to the beginning of an electronic property auction framework, which will eschew the current bureaucratic-laden magistrate court framework. In fact, most auctions around the country have been blocked for months by protests and the abstention of notaries, due to opposition by their associations.

The memorandum-mandated out-of-court settlement framework is also expected to accelerate liquidations.

The last “tool” in the kit remains write-offs, although bank officials in Athens told “N” the goal in the initial phase is to rely loan restructuring and liquidations.

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