Systemic Danger for Eurozone

Handelsblatt: NPLs may turn into a systemic risk for Greece


Greece’s four systemic lenders are contending with increased spending and reduced revenues, as net profits from interest – that usually contribute 75 percent of revenues – shrank in the first nine months of the year to just 14 percent, while operating costs rose 3.5 percent. Banks’ total losses in the year to end-September came to 151 million euros, almost twice the figure recorded in 2017, Handelsblatt warned on Thursday.

The German financial daily argued that 2019 will be critical for the country’s banks, while there is no sign that the situation will improve any time soon as Greek lenders face huge challenges.

The banks’ failure to achieve stability in 2019 would make it even more difficult for Greece to return to the markets, and in a worst-case scenario Athens will need a fresh bailout from its creditors, meaning that Greek nonperforming loans constitute a risk for the whole eurozone, Handelsblatt commented.