Banks beat NPL reduction target

Greek banks made further progress in reducing their exposure to doubtful and nonperforming loans during last year’s fourth quarter, central bank data showed on Thursday.

So-called nonperforming exposures (NPEs) are the biggest challenge facing the sector and at the end of December they had fallen by 4.7 billion euros to 95.7 billion, or 43.1 percent of banks’ overall loan book, the data showed.

This compares with a target of 48.5 percent, or 95.9 billion euros.

The reduction in the fourth quarter was the highest quarterly drop since the start of the crisis, the central bank said, brought about mainly by write-offs of 2.1 billion euros and loan sales of 1.8 billion.

The fourth quarter also saw improved collections and liquidations.

Default rates slowed and were lower than the pace of restoring loans back to performing status (cure rate), it said.

The central bank noted more progress on consumer and business loan NPEs compared to sour mortgages during the fourth quarter.

At the end of December 2017, the NPE ratio of mortgages was 43.4 percent, that of consumer loans 49.3 percent, with sour business loans at 41.8 percent.

Coverage by loan-loss provisions was 47.4 percent, slightly down from the third quarter.

[Reuters]