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BoG governor urges banks to accelerate NPL clean up

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In a press interview with Reuters, the BoG governor stated that Greek banks should be more ambitious when it comes to NPL resolution and urged them to accelerate sales of NPLs in an effort to speed up the resolution process.

According to Reuters, NBG, Alpha and Piraeus are working on NPL transactions (due by next March) totalling some EUR5.5bn in face-value terms, mostly for unsecured consumer exposures: Eurobank sold a EUR1.5bn consumer NPL portfolio (EUR0.6bn net of write-offs) in the past month.

Bankers describe bad debts as “the elephant in the room”, a huge problem often overshadowed by years of tense bailout negotiations between Athens and its EU lenders.

“Outright sales of unsecured NPLs will be the ones to start the dance,” a senior Alpha banker said to Reuters.

In the same context responding to European Parliament, ECB’s supervisory chair Daniele Nouy urged full implementation of recently legislated tools to reduce NPE stocks, eg “making the new platform for electronic auctions operational”.

 

She also noted that, despite significant progress, “additional efforts will be needed to strengthen the capacity of the Greek judicial system and insolvency framework”.

 

Finally, Ms Nouy once again stressed that she sees “no merit” in another AQR for Greek lenders, instead pointing to on-site inspections (to be launched later in the year) focusing on NPE management.

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