The financial crisis and a harsh 2010-13 recession left
Portuguese banks saddled with piles of bad loans, but since
their NPLs peaked in mid-2016, they have sold large
non-performing portfolios and restructured credit.
According to the central bank, lenders brought NPLs down to
9.87 billion euros ($10.77 billion) in December from the peak of
50 billion euros in June 2016, when the NPL ratio stood at
17.9%.
The bad loans ratio in Portugal is still above the average
of the European members of the Single Supervisory Mechanism,
which stood at 1.79% in September, according to ECB data.
Moody's Investors Service said on Wednesday that Portuguese
banks are expected to remain resilient to the country's sharp
economic slowdown this year and rate hikes by the ECB,
predicting only a modest increase in bad loans.
The central bank said the return on equity (ROE) of
Portuguese banks increased to 8.8% last year compared to 8.3% in
2021, thanks to "higher net interest income and lower provisions
and impairments."
($1 = 0.9161 euros)
(Reporting by Sergio Goncalves; editing by Andrei Khalip and
Josie Kao)
By Sergio Goncalves
LISBON, March 30 (Reuters) - The share of bad loans in
Portuguese banks' loan portfolios fell to an all-time low of 3%
in December, beating the previous record of 3.6% set in 2008
when the global financial crisis was just unfurling, Bank of
Portugal data showed on Thursday.
The non-performing loans (NPL) ratio dropped from 3.7% a
year earlier despite a steep rise in interest rates by the
European Central Bank (ECB).
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