ZCZC
BCN-15
GREECE-EU-BANKING-LOANS
EU approves scheme to reduce Greek bad loans
ATHENS, Oct 11, 2019 (BSS/AFP) – The European Commission on Thursday
approved a Greek scheme to reduce bad loans weighing down the country’s
banks, limiting new credit and holding back economic recovery.
“I welcome that with the Greek government we have a found a market conform
solution to tackle the stock of non-performing loans weighing on the balance
sheets of Greek banks,” competition commissioner Margrethe Vestager said in a
statement.
Under the scheme, a private securitisation vehicle will buy non-performing
loans from the bank and sell notes to investors, with the Greek state acting
as guarantor.
Over the last three years, Greek banks have removed some 30 billion euros
in non-performing loans from their books, mainly through write-downs and loan
portfolio sales, Bank of Greece governor Yannis Stournaras said on Thursday.
But they are still burdened by about 75 billion euros in NPLs,
constituting 43.6 percent of total bank loans, he said.
The banks have agreed with the ECB to further reduce the ratio of NPLs to
35 percent by the end of this year, and to around 20 percent by the end of
2021, Stournaras said.
But even if these targets are achieved, the NPL ratio of Greek banks will
still be five times the EU average, he said.
Greece expects its economy to grow by 2.8 percent in 2020 whilst
respecting fiscal pledges to the country’s creditors, a draft budget released
Monday said.
Greek bank private deposits have increased by 13.3 billion euros since the
beginning of 2018, Stournaras said.
BSS/AFP/HR/0950