Pressure to grow on banks to reach NPL reduction goal

Any Greek banks not reaching their targets regarding the reduction of nonperforming loans face penalties such as automatic sales of bad loan packages, management-level changes and additional capital demands, or share capital increases, according to the Single Supervisory Mechanism of the European Central Bank.

This measure means that for the first time since the start of the financial crisis, lenders will be put under significant pressure to achieve specific quantifiable targets on the front of NPLs.

Bank managers and the SSM will agree on specific action plans with specific timetables and quantifiable targets by end-September so that the local lenders cut their nonperforming exposures by 40 percent, or about 40 billion euros, within 39 months, ie from the fourth quarter of this year to end-2019.