Banks to sell 13.5 bln euros of NPLs this year

Greek banks are stepping up efforts to rid themselves of nonperforming loans, planning to put portfolios with a total face value of 13.5 billion euros up for sale within 2018.

The bulk of that amount, or 9.7 billion euros, is expected to have been transferred by the end of the year’s first half, while another 3.8 billion is set to be offered in the second half.

This follows the sale of two major portfolios by Alpha Bank and Eurobank, raising the total amount of loans unloaded by banks by end-2018 to 20 billion euros.

The four systemic lenders are expected to comfortably exceed the target for the reduction of NPLs via sales through the planned concession of loan portfolios. According to the commitment they have made to the European Central Bank’s Single Supervisory Mechanism (SSM), that target is set at 11.5 billion euros by the end of next year.

Write-offs, which are expected to reach up to 10.6 billion euros, comprise a considerable share of the bad-loan reduction process, as are debt settlements, which will need to bring in 21 billion euros by end-2019. However, the sales are a vital instrument as they secure the immediate streamlining of the banks’ financial reports.