Fitch: Greek NPLs to drop below 7% in 2022

The nonperforming loan ratio of Greek banks will be below 7% in 2022, while in 2023 it will further decline to around 6%, Fitch Ratings estimates, despite the energy and inflationary shock hitting the European economy.

However, the rating agency warns there is a risk of the formation of new NPLs in case the macroeconomic environment deteriorates further.

Fitch expects loan default rates to rise due to the effects of high inflation, supply chain disruption and the economic slowdown, with the chances of a technical recession in the eurozone increasing due to the implementation of the winter energy bill.

Still, Fitch sees Greek banks as well protected against these risks.