Rising property prices will give home owners that have defaulted on their mortgage an incentive to pay back their loans, according to the chief executive of National Bank of Greece, Paul Mylonas.
Speaking at a conference, Mylonas said on Tuesday that better home prices, that have started to emerge in the Greek market, is a basic part of the solution to the bad loan problem faced by lenders as the country emerges from an eight year crisis.
In reference to the way banks are managing non performing loans, Mylonas said they have offloaded non secured loans but that now the hard part comes in selling corporate loans and mortgages.
Greek banks have been under increasing pressure from regulators to sell bad loans at a faster pace. Non performing loans held by Greek banks currently amount to about 47 percent of total loans.
Although economic conditions have started to slightly improve, banks are seeing more clients default on loans, raising concerns that lenders still soon need to raise fresh capital. Mylonas said he sees this as being unlikely.