Wednesday, October 12, 2016

Non-performing loans rose slightly in August – the Observer

The non-performing loans in banks went up again in August to more than 18 billion euros, due to the growth of credit in default of the companies.

According to data from the Bank of Portugal, today disclosed, the overdue loans of the companies were 12.960 million euros in August, over 34 million euros in July, which translates to a ratio of overdue credit companies 16,48%, taking into account the 78.640 million euros that the banks had lent to companies in that month.

Already overdue credit to individuals fell in August to 19 million euros, compared with July, to 5.071 million euros, which is equivalent to 4,29% of the total borrowed (118.142 million euros).

In total, the banks had in August 18.031 million euros in non-performing loans, over 15 million of that in July, the equivalent of a slight increase of 0,083%.

The approximately 18 billion euros in bad debt accounted for in August 19,68% of the total borrowed by banks to private individuals and companies, which was then 196.782 million euros.

Despite the slight increase of non-performing loans, this is still at levels below recent months. Overdue credit has reached the maximum value in August 2015, when it touched 19 billion.

The high level of non-performing loans in the Portuguese banking has been considered to be a risk to the financial stability and the profitability of the sector and the Bank of Portugal has been advocating the creation of a vehicle to remove from the balance sheets of the banks these troubled assets, in spite of the opposition already voiced by some bankers.

In the proposed Major Options of the Plan (GOP) for 2017, the Government argues that are created specific measures to reduce the 'stock' of credit sold, despite never speaking directly in the creation of a 'bad bank' (a vehicle for troubled assets).

As for the 'stock' of credit from the banks in August, this was 196.782 million euros, which represents a decrease of 797 million euros compared to July, or -0,40%.

The total loans fell in the particular, least 245 million euros (118.387 million in July to 118.142 million in August), but especially in businesses, to get off 552 million euros (79.192 in July to 78.640 in the next month).


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