July 27 (SeeNews) - Serbian banking sector non-performing loans (NPL) ratio declined further to 20.3% at the end of May, reflecting the implementation of the central bank's strategy for NPL resolution, the governor of the National Bank of Serbia (NBS), Jorgovanka Tabakovic, said on Wednesday.
At the end of March, the NPL ratio was 20.9%, down from 21.6% at the end of 2015, according to previously released central bank data.
In nominal local currency terms, NPLs narrowed by 23.3 billion dinars ($207.8 million/188.8 million euro) during the first five months of 2016 after staying flat in 2015 relative to 2014. This came after NPLs were continuously rising for the preceding eight years, NBS deputy governor Diana Dragutinovic said, attributing the positive results to the stable exchange rate, which contributed to the generation of fewer NPLs, as well as to regulatory measures that encouraged banks to ensure increased coverage of NPLs with provisions and faster clean-up of NPLs from their balance sheets through loan write-offs or sales to other legal persons.
"Still, like in most regional peers, resolving the high level of NPLs remains a priority," governor Tabakovic said during a presentation of the central bank's 2015 financial stability report.
Tabakovic noted that the Serbian banking sector remained well-capitalised and highly liquid, as well as resilient to shocks from the international and domestic environment despite the numerous challenges it faced. She underlined that no capital shortfall was identified in any of the 14 lenders included in the survey, which account for 88% of the banking system assets.
(1 euro=123.409 dinars)