Bosnia records largest drop in non-performing loan ratio in CESEE in 2020
SOFIA (Bulgaria), June 8 (SeeNews) – Last year, Bosnia and Herzegovina recorded the largest annual decline in the ratio of non-performing loans (NPL) among 17 countries in Central, Eastern and South-Eastern Europe (CESEE ), reducing the ratio from 4.3 percentage points (pp) to 3.1%, according to a new report from the European Bank’s “Vienna” Coordination Initiative.
The average NPL ratio in the CESEE region fell by 0.2 percentage point over the year to reach 3.5% at the end of 2020, according to the NPL Monitor for CESEE published by the NPL Initiative, a subset of the Initiative. from Vienna, Monday.
Albania continued to lead among the 17 countries, with its NPL ratio standing at 8.1% at the end of December, down 0.3 percentage point over the year.
In South Eastern Europe (SEE), except Albania and Bosnia and Herzegovina, the countries that decreased their NPL ratios in 2020 are Bulgaria, North Macedonia, Serbia and Slovenia . Croatia, Kosovo and Montenegro increased their NPL ratios, while Romania’s NPL ratio remained unchanged in 2020.
The volume of non-performing loans in the CESEE region fell 3.9% over the year to reach 32 billion euros ($ 39 billion) at the end of 2020.
North Macedonia saw the largest annual decline in the volume of non-performing loans – of 26.4% – among countries in South-Eastern Europe last year.
Public measures that were implemented to mitigate the effects of the pandemic prevented an increase in NPLs in the CESEE region last year, but the ultimate impact of the crisis on the quality of banks’ assets remains uncertain, according to the report.
“However, NPLs are expected to increase further, as government measures start to weaken. Although the magnitude of the impact remains to be seen, the recent increase in Phase 2 loans, particularly among loans that have benefited from payment delays, can be seen as indicative of an intensification of credit risks to the Bank. future ”, we read in the report.
In addition, countries that depend on vulnerable sectors such as accommodation and food, arts and entertainment, commercial real estate or transport, are likely to be particularly affected.
Details on the profile of NPLs from ten South Eastern European countries are as follows:
|NPL Ratio, Dec. 2020||NPL ratio (variation y / y, pp)||NPL volume, December 2020 (in billions of euros)||Volume of NPL (variation y / y,%)|
The Vienna Initiative is a framework for safeguarding the financial stability of emerging Europe. It was launched at the height of the first wave of the global financial crisis in January 2009. It brings together all relevant actors from the public and private sectors of EU-based cross-border banks active in emerging Europe, which have a large part of the banking sectors. in this region.
($ = 0.8210 euro)