TWO OF Greece’s largest banks, Piraeus and the National Bank of Greece (NBG) plan to set up bad banks, separating loans that are no longer functional from the working side of the institutions.
Anthimos Thomopoulos, the deputy CEO of Piraeus Bank voiced concerns about the number of non-performing loans still shadowing the Greek economy in September.
A third of Piraeus’ loans are classed as non-performing, meaning that they have been in arrears for more than three months.
Petros Christodoulou, chief executive of the NBG, said that the group was looking to set up the bad bank within the next two months.
He added: “You need to have clear focus, clear identity of the NPLs, clear management of the NPLs, clear responsibility structure of who’s responsible for what.”
The NBG has not yet made decisions as to how large the bad bank was likely to be once the change was made, according to Christodoulou.
According to figures from the International Monetary Fund, the proportion of loans which are non-performing has soared in south-eastern Europe generally, up from around four per cent at the start of the financial crisis to over 15 per cent this year.