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Serbian banking sector NPL ratio falls to 18.7% at end-Sept

Author Radomir Ralev
Serbian banking sector NPL ratio falls to 18.7% at end-Sept Source: pixabay.com

BELGRADE (Serbia), December 8 (SeeNews) - The Serbian banking sector's non-performing loans (NPL) ratio declined to 18.7% at the end of September, down by 3 percentage points from December 2015, its lowest level since June 2013, the country's central bank, NBS, said.

The corporate NPL ratio stood at 19.7% at end-September, whereas the household NPL ratio was 10.7%, NBS said in a statement on Wednesday.

The NPL ratio of housing loans came in at 9.2% and cash credits showed an NPL ratio of 8.6%, the central bank added.

The acceleration of economic activity growth contributed to the reduction of NPL ratio in all segments. The positive trend was most visible in the sectors with the highest growth such as construction, agriculture, industry and trade, NBS pointed out.

Another positive factor was that Serbian banks kept writing off NPL portfolios by selling them to companies outside the banking sector, NBS said.

The total value of corporate loans extended by Serbian banks in the first nine months of 2016 rose by 18.3% on the year to 626.2 billion dinars ($5.5 billion/5.1 billion euro), and lending to households rose by 38% to 263.2 billion dinars. 

Under its 1.2 billion euro ($1.3 billion) precautionary stand-by agreement with the International Monetary Fund (IMF), Serbia is implementing a NPL resolution strategy, adopted in August 2015. Its goal is to identify and address legal, tax, institutional and other factors that prevent debt resolution.

(1 euro=123.250 dinars)

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