One in four loans remains in arrears

The increased hardship of individuals and businesses to meet their banking obligations has been recorded in the interim report of the Bank of Greece, according to which the quality of bank loan portfolios is deteriorating monthly.

One in four consumer credits, including credit cards, is unpaid. Delays in payments are rising and the outlook remains bleak for the upcoming year.

In the first half of 2011, NPLs increased by 6bn in total in all types of loans. Collectively, these bad debts of businesses and households for the January-June period exceeded 32bn euros, even though banks supplied additional provisions amounting to 3 bn.

Based on data from the Bank of Greece, loans in arrears of more than three months represent 13% of the total loan portfolio in the Greek banking system, up by 2.5 % from 10.5% in December 2010.

On top of that, problematic loans include consumer loans, 24% of which are in arrears.

An alarming increase is also noted in delays of mortgage loans, 12% of which amounting to 9.5 bn is not paid on time.

2011 is also the first year in which a dramatic deterioration in the business sector has been recorded, where 3bn worth of loans changes category from productive to in arrears, increasing the amount of bad corporate loans to 13.6 billion euros in late June.