Greece has reported some major progress with its non-performing loans after four of its biggest banks recorded a significant 22% reduction in their bad loan stock.
The reduction is for the first half of the year in comparison to a year earlier and comes at a time when other industries are suffering huge financial losses.
The non-performing loans they have in their portfolios, from both within Greece and overseas, amounted to 61.1 billion euros at the end of June compared to 78.4 billion euros for the January-June 2019 timeframe.
Bad loans within Greece alone also saw a similar reduction to 56.8 billion euros compared to 73.2 billion a year earlier.
The reduction is thought to be associated with payments made before the coronavirus pandemic as well as through their own activity. The arrangement of bad loans that prompted the creation of new non-performing loans is thought to have helped at a time when the trend towards reducing bad loan stocks, which has been seen over the past few quarters, was consolidated.
The biggest non-performing loan reduction came from Eurobank whose reduction in the first half of the year amounted to 8.1 billion euros. This reduction was thanks in part to the completion of the concession of the Cairo portfolio worth 7 billion euros. Eurobanks current bad loans sit at 6.2 billion euros giving them a NPL index of 17.2% in Greece.
Alpha Bank came in second however were still a considerable way behind Eurobank with a reduction of 3.5 billion euros. This was mainly thanks to the sale of the Neptune portfolio of corporate bad loans with the lenders management now targeting the reduction of its non-performing exposures (NPE) index from 43.5% as of the end of June to 24% by year end. The lender plans to do so through the Galaxy transaction that will securitize loans worth 10.5 billion euros.
National Bank took its NPE index down to approximately 30% by reducing its bad loans by 2.9 billion euros. It is now eyeing up the concession of the Marina and Danube portfolios worth 300 million and 200 million euros respectively. This follows the sale of packages adding up to 3.7 billion euros last year.
Piraeus Bank also saw its NPL stock decrease by around 2.8 billion euros, taking its group level total to 23.3 billion euros, 22.6 billion euros of which is within Greece.