The openings of banks to non-performing loans have significantly decreased to below €2 billion, but a large part of the impaired assets have been transferred to credit management entities and therefore remain in the economy.
According to the Central Bank’s data, as of 31.12.2023, the total loan balances in the eight companies licensed by the CBC (including KEDIPES) amounted to €21.5 billion (of which €6.4 billion in KEDIPES), involving around 75 thousand loan contracts.
Of these contracts, those with a cumulative balance of €10.8 billion belong to households, and the remaining €10.7 billion to companies.
These amounts represent the total contractual balances of loans acquired by the Credit Acquisition Companies from the banks and differ from the amounts paid by the Credit Acquisition Companies for the acquisition of these non-performing loans. Out of the €21.5 billion, €19.9 billion are classified by the Credit Acquisition Companies as non-performing exposures, while the remaining contracts receive regular servicing.
The remaining red loans in the real economy pose a potential threat to growth, and therefore the IMF, the European Commission, and rating agencies consistently emphasise the need for an effective framework for managing Non-Performing Exposures (NPEs).
In banking institutions, problematic loans decreased to below €2 billion in 2023, continuing the significant improvement observed in recent years. Out of the total NPEs in 2023, households have non-performing loans of €1.07 billion and businesses €774 million.
At the end of December 2023, the NPE ratio to total loans decreased to 7.9%, from 9.5% in 2022 and 11% in 2021.
According to the CBC, the continued downward trend of NPEs during the fourth quarter of 2023 is attributed, in order of significance, to loan write-offs, loan repayments, as well as restructured loans.
