ATHENS: Greek banks need to do more to reduce their very high stock of non-performing loans (NPLs), the European Central Bank’s chief supervisor Daniele Nouy was reported as saying in an interview published by To Vima newspaper on Saturday.

Non-performing exposures (NPEs), which comprise NPLs - past credit due for more than 90 days - and restructured loans likely to turn sour, are the biggest challenge facing the banking sector in the country which is set to exit its third international bailout in August.

Nouy said that dealing with NPLs in a sustainable way “is still very much a work in progress” and “a top priority”.

“Greek banks must do more and do it faster,” she said, adding that lenders have good profitability capacities, which are, however, cancelled out by the need to provision for NPLs. “That is why the top priority for Greek banks is to significantly reduce the production of new NPLs, by improving their credit underwriting criteria, and to clean up their balance sheets.”

Published in Dawn, February 25th, 2018