Goldman Sachs weighed in on the Bank of Greece's (BoG) recently announced plan to better tackle "bad debt" afflicting Greece's four systemic banks, while nevertheless avoiding a forecast on how successful the initiative will be.
The international investment bank does estimate that the percentage of non-performing exposures held by Greek banks will fall to 33 percent, from 48 percent, in the second quarter of 2018. The figure, if reached, will still be among the highest in the Eurozone.
At the same time, Goldman Sachs assesses "bad debt" on Greek banks' balance sheets at 23 cents to the euro, much lower than the current market level of 51 cents to the euro. Conversely, the assessment is still higher than recent sell-offs of "bad debt" portfolios to distress funds, which hovered between 18 to 20 cents on the euro.