NPEs to drop by 26 bln euros in 2020

The state's asset protection plan, dubbed Hercules, will render securitizations a more attractive instrument for the reduction of nonperforming exposures (NPEs) of Greek banks, Morgan Stanley says in a new report, while Germany's Scope Ratings notes that securitization conditions in Greece are improving.

Morgan Stanley estimates that Hercules will relieve banks of bad loans amounting to 22 billion euros next year, reducing their average NPE index to 23 percent, from 36 percent this year, while the banks themselves will shrink their NPEs by another 4 billion euros in 2020.

The report projects that Alpha will achieve an NPE index of 18 percent next year, from 40 percent in 2019, while Eurobank's is seen dropping from 16 to 10 percent, and Piraeus' from 48 to 42 percent next year.

According to Morgan Stanley, besides Hercules, there are also macroeconomic,...

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