Stournaras: Greece Needs to Urgently Address Non-Performing Loans

About one in six businesses in Greece are late in payments, Bank of Greece Governor Yannis Stournaras said on Thursday, addressing an audience at the Federation of Industries of Northern Greece (FING) in Thessaloniki.

Stournaras said it is urgent to address the problem of non-performing loans (NPLs), saying it should be a priority among the reforms discussed between Greece and its lenders, as it is a very significant obstacle to economic recovery.

“This is the biggest challenge facing today, not just the banking system but the Greek economy,” he said, adding that according to a conservative estimate based on a sample of 13,000 businesses with loans over one million euros, an average of one in six has the characteristics of a bad payer.

He said there are indications that the analogy is significantly higher for smaller businesses and households.

“But this will change in the immediate future with a series of initiatives that are already underway to address the aforementioned causes which have hindered banks’ efforts to resolve the problem for years,” he said.

Stournaras also expressed confidence that the approval of the prior actions by the parliament agreed during the second program review will open the way for the disbursement of the next loan tranche from the Eurogroup on May 22.

“The financial markets are already expecting this result,” he said.

Source: ANA-MPA