The share of bad loans in Slovakia’s banking sector reached 4.74% of total loans as of end-February 2013, slightly up from 4.71% at end-January, preliminary data by the central bank showed. Compared to the end of February 2012, the non-performing loan (NPL) ratio improved by 15bps.
The total value of bad loans fell 2.6% y/y to EUR 1.99bn in February, following a 1.7% yearly decline in January. The total value of the bad loans in the Slovak banking system fell on an annual basis for the first time in September 2011 following a constant upward trend since the country’s entry into the euro zone in 2009. Compared to the previous month, bad loans rose by 0.6% in February.
IntelliNews comment: The asset quality of Slovakia’s banking system is expected to remain strong in 2013, although the deteriorating situation in the external environment and the weaker domestic environment pose some risks to the improvement trend in the quality of banks’ loan portfolio. The main risk is seen in the area of corporate credit, while banks’ exposure to household credit risk remains within safe limits.
| EUR thousands | end-Feb-13 | end-Jan-13 | end-Feb-12 | y/y change | m/m change |
| BAD LOANS - TOTAL | 1,986,725 | 1,975,795 | 2,040,390 | -2.6% | 0.6% |
| Bank overdrafts and resolving credits | 293,221 | 293,162 | 308,164 | -4.8% | 0.0% |
| Operating loans | 53,217 | 51,521 | 73,374 | -27.5% | 3.3% |
| Investment loans | 438,167 | 448,787 | 452,424 | -3.2% | -2.4% |
| Consumer loans | 200,864 | 197,597 | 207,254 | -3.1% | 1.7% |
| Mortgage loans | 105,702 | 104,954 | 104,952 | 0.7% | 0.7% |
| Building loans | 7,320 | 7,198 | 7,023 | 4.2% | 1.7% |
| Intermediate loans for house purchase | 88,454 | 85,956 | 85,687 | 3.2% | 2.9% |
| Other loans for house purchase | 475,945 | 467,144 | 462,134 | 3.0% | 1.9% |
| Other loans | 301,092 | 296,698 | 308,477 | -2.4% | 1.5% |
| Credit cards | 22,743 | 22,778 | 30,901 | -26.4% | -0.2% |
| Source: National Bank of Slovakia |
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