Post-2011 loans show low NPL rate

Loans that local banks have issued since 2011 are showing exceptionally low rates of payment delays. This concerns loans to both households and corporations, and comes despite the fact that economic conditions have deteriorated and the economy remains in contraction.

Estimates by officials at Greece’s four systemic banks say new loans issued after the country’s entry into the bailout program are showing a single-digit rate of default, against an overall nonperforming exposure rate of 46 percent.

Delays in the repayment of mortgage loans issued after 2011 – mainly in the 2013-14 period – amount to just 5 percent, consumer loans (including credit cards, car purchase loans etc) have an 8 percent nonperformance rate, while issues to small and medium-sized enterprises have a remarkably low bad-loan rate of less than 2 percent. This does not concern restructurings of older loans which usually – particularly in the case of corporations – come with some new financing.

Of course those new loans are just a drop in the portfolio ocean: Bank officials say that after 2011, only mortgages worth 1.5 billion euros were issued, plus consumer loans of 2.5 billion and SME loans of 500 million. Banks have been extremely careful in their funding, which also explains the low NPL rate stemming from those clients.