Banks slash bad-loan stock by over 15 billion euros in a year

Greece’s four systemic banks have reduced their stock of nonperforming exposures (NPEs) by 15.3 billion euros in the last year, as their financial reports at the end of June showed that their total NPEs stood at 78.8 billion, compared to 94.1 billion a year earlier.

This reduction is the outcome of loan restructurings and settlements as well as the extensive sales of loan portfolios.

According to the second-quarter results issued by banks last week, Eurobank considerably reduced its NPE stock from 18.9 billion euros a year earlier to 14.3 billion, bringing down its share of NPEs from 40.7 percent to 32.8 percent of all loans issued.

Alpha Bank cut its NPEs from 28.8 billion euros in June 2018 to 24.7 billion last June, reducing the NPE share from 51.9 to 48.1 percent.

National also significantly contained its NPEs, from 17 billion to 13.7 billion euros within a year, pruning the share of NPEs from 42.4 percent at end-June last year to 36.5 percent just over two months ago.

Piraeus Bank lightened its load of NPEs from 29.4 billion to 26.1 billion euros by end-June, but it still has the largest sum, as well as the biggest NPE share, which came to 51.4 percent, from 54.7 percent in June 2018. Within this month the lender is expected to complete an agreement with Swedish group Intrum for the concession of the management of Piraeus Bank’s entire NPE portfolio. Next year Piraeus is targeting the sale of NPE portfolios totaling 4.5 billion euros.

Eurobank is also in the process of conceding NPE portfolios, aiming to bring its NPE index below 16 percent by the end of this year and to less than 10 percent by the end of 2021. National aims to contain its NPE stock by another 1.8 billion euros, mainly via portfolio sales, while Alpha is eyeing the sale of 5.5 billion euros of loans in total this year.