Moody’s Investor Service informed its clients that Greek systemic banks are on a good course to meeting their nonperforming exposure reduction targets, with Eurobank and National being closer to making it by 2021, while Alpha has the strongest tangible capital base, ekathimerini.com reports.
In a report published on Monday Moody’s pointed out that large stocks of bad debt continue to weigh on Alpha, Eurobank, National and Piraeus, posing a significant threat to their solvency.
NPEs averaged close to 47% of the banking sector’s gross loans in September 2018, a consequence of high unemployment and the country’s deep recession in recent years.
“We believe that the gradual pickup in economic activity and falling unemployment in Greece, combined with NPE sales, liquidations and write-offs, will gradually reduce problem loans over the coming 18 months,” Moody’s cited.
It continued that “the regulators wish to see banks’ NPE ratios reduce below 10 percent by the end of 2021, which will be very challenging to achieve.”
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