Bank of Greece says $46.5bn of bad loans serviced by specialist firms in Q4

ATHENS: Credit-servicing firms licensed by Greece's central bank were servicing a total of 38.9 billion euros ($46.5 billion) of non-performing loans at the end last year's final quarter, the Bank of Greece said on Tuesday.

The sum increased by 6.3 billion euros from the third quarter of 2020, it said.

Greek banks have made progress in reducing risk on their balance sheets from impaired loans accumulated during the country's debt crisis via writedowns, restructurings and securitisations, all taking part in the government's "Hercules" bad-loan reduction scheme.

Although non-performing loans have been reduced by about 59 billion euros from a peak of 106 billion in March 2016, banks' overall NPL ratio of 36% at the end of September remains far above a euro zone average of 2.9%.

Shedding these impaired loans is crucial for banks to be able to shore up their profitability.

The Bank of Greece has licensed a total of 26 credit servicers to operate in the country, including Cepal, doValue- Greece, Intrum Hellas, Pillarstone and Cerved Credit Management.

Non-performing corporate credit rose to 13.9 billion euros in the fourth quarter of 2020, making up 36% of the total being serviced, the central bank said.

Impaired loans to individuals and private non-profit institutions made up the biggest chunk, 46%, of the total of loans being serviced.

The data showed that out of a total of 18.9 billion euros of non-performing loans to individual borrowers, 73% had to do with consumer loans. Mortgages made up 27%.