Non-performing loans (NPLs) represent a critical challenge for the Greek banking system and the economy generally.
NPLs across the Greek banking sector are said to be in the region of €150 billion, and according to the World Bank , Greece's ratio of non-performing loan to gross loans stood at 34.7%, compared to a Euro area average of 5.7%.
There is a renewed energy and emphasis on finding an answer to the challenge posed by NPLs. The continued presence of such large NPL balances acts as a significant drag on the Greek economy and absorbs huge amounts of the banks' capital that could otherwise be used to drive economic growth.
We know having trust and integrity in a market is a crucial pillar in any vibrant economy and investors, especially the international players who will be critical to Greece's economic recovery, need to know non-performing loans can be dealt with effectively before they will invest.
So, are we going to see significant activity in the Greek NPL and restructuring market?