Non-performing loan

Moody's views the Bank of Greece plan to manage nonperforming loans as a credit positive development for the country's lenders. The rating agency said in a report on Thursday that the plan will also improve the quality of banks' asset portfolios thanks to the reduction in the rate of deferred tax credits.

At a time when nonperforming loans are decreasing significantly in the eurozone, Greece is not only the member-state with the highest NPL rate, but it also has the lowest reduction rate, according to the third progress report on the issue by the European Commission, published on Wednesday.

Foreign banks Morgan Stanley, IBG and Deutsche Bank on Friday raised questions regarding the plan that the Bank of Greece presented on Thursday with the aim of reducing local lenders' bad loans, saying the idea is positive under certain conditions.

The Bank of Greece has a plan for helping the country's banks slash their pile of nonperforming loans by as much as half, according to a report by Bloomberg on Tuesday.

The management of Piraeus Bank is examining the use of a model previously employed by Attica Bank for its capital boost through the securitization of its bad loans. The objective is to draw 500 million euros that will count as Tier II capital, fulfilling the commitment made by the lender to the Single Supervisory Mechanism (SSM).

The European Bank for Reconstruction and Development (EBRD) and Waterfall Asset Management have joined B2Holding in investing in a bad loan portfolio originated by Greece's Alpha Bank, EBRD said on Monday.

Greece's finance minister said on Thursday the challenge of wrestling down non performing loans at the country's commercial banks was 'totally manageable'.

Euclid Tsakalotos told lawmakers all Greek banks had reached and exceeded targets set on reducing their stockpile of bad loans. [Reuters]

Fitch Ratings has upgraded Bank of Cyprus's Issuer Default Rating (IDR) to BB+ from BB. The rating is just one step before investment grade.

This update comes following the announcement that the bank is in the process of securitising a portfolio of €2.8 billion of gross loans, including €2.7 billion of non-performing loans (NPLs), equivalent to about a third of the bank's total NPLs.

Greek banks are under strong pressure to reduce their nonperforming loans to below 10 percent of total loans, from the very high current level of 45 percent, by far the worst rate among eurozone banks.

Banks are expected to sell more unserviced corporate loans in 2018 and 2019, in their effort to achieve nonperforming loan reduction targets, according to the Monetary Report that the Bank of Greece published on Monday. The report found that while the sale process is continuing, the pace has slowed.