Credit sector made extra provisions of 5.7 bln

Greece's systemic banks made additional provisions of 5.7 billion euros for tackling nonperforming loans (NPLs) in the context of adopting the new international financial reporting standard (IFRS9).

The new financial reporting rules alter the definition of a bad loan, making it stricter and more specific, reducing the scope of differentiation among banks. By and large, the adoption of IFRS9 means that practically all nonperforming exposures (NPEs) are considered NPLs, thereby requiring their full coverage with additional provisions by banks. Crucially for banks, those extra provisions do not affect their financial results.

Piraeus Bank announced on Tuesday that the impact of the first application of IFRS9 on last year's results amounts to 1.6 billion euros. For Alpha Bank the additional provisions amount to 1.55 billion euros, with its CET1 common share capital index...