At the end of 2019, Serbia and Slovenia had the lowest rate of non-performing loans (NPLs) in total placements among the 10 ranked economies in the region, according to the report of the forum of the Vienna Initiative European Banking Coordination.
According to the forum, Slovenia and Serbia had the lowest share of NPLs in total bank loans in the region of Southeast Europe with rates of 3.4 percent and 4.1 percent, respectively, according to a ranking published on the Seenews portal.
According to the figures from the semi-annual report of this subgroup of the Vienna Initiative, in 2019 Serbia reduced the volume of problem loans by 12.1 percent annually, to 1.0 billion euros, and Slovenia by 40.8 percent, to 1.1 billion euros.
On the other hand, Albania still holds the leading position in the region in terms of non-performing loans, with a ratio of 8.4 percent at the end of December, followed by BiH with a share of NPLs of 8.0 percent, Bulgaria with 7.6 and Croatia with 7.0 percent.
The volume of NPLs in the region of Central, Eastern and Southeastern Europe (CESEE) decreased last year by 8.2 percent compared to the year before, to 33.8 billion euros.
The average share of problem banks in total bank loans in the region was 3.8 percent, which is 1.1 percentage points less than the previous year.
“The outbreak of the Covid-19 pandemic has caused unexpected new pressures on the region and the world. The consequences of the closure of economies in all jurisdictions will affect the decline of macroeconomic and sectoral indicators, with a probable new increase in NPLs,” the document reads.
According to the report, three waves of NPL growth are possible, depending on the speed of economic recovery, with the first wave manifesting in the fourth quarter of 2020 when the tax and other benefits introduced in the midst of a pandemic cease to be valid and certain borrowers are unable to service debts.
The second, slower and wider wave is expected in the first half of 2021, with the intensity of business decline and job losses largely dependent on the extent of damage to the economy and the market and the speed of recovery, and the third wave is projected in late 2012 festum consequences of sectoral and supply chain disruptions, Novosti reports.
