Bad loans fall sharply in Macedonia after banks ordered to clean balance sheets

Bad loans fall sharply in Macedonia after banks ordered to clean balance sheets
By Valentina Dimitrievska in Skopje August 24, 2016

The non-performing loan (NPL) ratio of Macedonian commercial banks dropped to 7.5% of the total loan portfolio at the end of June, from 11.5% a year earlier, data from the country’s central bank indicated. Compared to the previous quarter, the banks' NPL ratio was down by 3.4pp.

Requirements from the central bank for commercial banks to "clean" their loan portfolios of old and non-performing loans have improved the quality indicators of banks' credit exposures, but on the other hand it slowed the growth of lending.

At-end June, the NPL ratio was the lowest among mid-sized banks, at just 3%. The NPL ratio of the big banks was 9%, while the highest rate was registered among small banks, 13.4%, data showed.

The total value of non-government loans extended by Macedonian banks and saving houses went up by 3.5% y/y to MKD274.4bn (€4.4bn) at end-June decelerating significantly from a 6.4% y/y increase at end-May.

The bad loan ratio was 10.8% at end-2015.

Data

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