This excerpt taken from the NBG 6-K filed Jan 21, 2009.
Quality of the loan book
The worsening macroeconomic performance and shrinking liquidity in the economy have not had a negative impact on the quality of the loan book; on the contrary, there has been a marginal improvement. The NPL ratio now stands at 3.3%, compared with 3.4% at the end of 2007.
The Groups cautious and consistent provisions policy throughout the rising cycle means that it is today in an advantageous position as regards the level of provisions, which cover over 75% of NPLs, before taking into consideration the value of collateral. Specifically:
· In Greece, NPLs stood at 2.8%. The provisions coverage ratio has remained consistently over 75%.
· In SE Europe, NPLs (excluding the legacy loans of Vojvodjanska) stood at 2.6%, and have a coverage ratio of 77%.
· NPLs at Finansbank stand at about 3.2% of its total loan book, and are covered 80% by provisions.
Under current conditions, it is particularly important that the Groups loan book is concentrated in low-risk sectors such as housing credit, and financing to large corporations and the public sector, which together account for 85% of total Group lending. Likewise, the corporate loan portfolio of the Group is well dispersed across industrial sectors, thus averting concentration in sectors that may be severely affected by the global economic crisis, such as shipping where the Groups exposure is just 1.9bn, or a mere 3% of the total loan book.