Greek banks to clear irretrievable debts of 20 billion euros

Bad loans totaling some 20 billion euros have been classified as irretrievable by Greece’s systemic banks.

Those old nonperforming loans account for about a fifth of all nonperforming exposures worth some 100 billion euros in total, and were taken out by companies that ceased operations years ago, with any equipment they may own no longer of any value. They also concern professional loans issued to freelancers who are no longer active in their profession, consumer loans or credit provided to people who have left the country or are classified as long-term unemployed, as well as mortgage loans for properties that for various reasons have dropped in value.

Those problematic loans, on which banks are unlikely to make retrievals at all, remain in the lenders’ financial reports as a result of the general negligence and delays in tackling the NPL problem. Bank officials stress that clearing out those “dead” loans’ financial statements is a priority for lenders.

Monitoring authorities are also pushing in that direction, even though they note that the stagnant economy demands the matter be tackled in a gradual and long-term manner, in the context of reducing bad loans in general. Banks say the 2017 NPL reduction targets will be met, but it will take a greater effort for success in 2018 too.