Even though having sold more than €5.7 billion in non-performing loans (NPL) and other toxic assets over last year, the six largest banks operating in Portugal still have another €25.8 billion to be cleansed from their balance sheets in order to fulfil regulatory demands.
Despite having followed different strategies on reducing its NPL pile stock, Portugal, Spain and Italy are being successful in cleaning up these toxic assets from their financial system, and they seem to be well positioned to continue their NPL reduction, Moodys says.
Notwithstanding the undergoing efforts, Moody’s Senior VP Maria Cabanyes said she hopes that banks keep pursuing their goal of converging with EU average, despite the three above mentioned countries still register high NPL ratios.
In Portugal, the banking sector has been pursuing a strategy that consists of selling their toxic assets. Altogether, in 2018 the country’s six largest banks sold more than €5.7 Bn in NPL and toxic assets, driving a significant decline within the country’s NPL ratio to 11% in the end of the year.
Despite considerable progress, there are still 25.8Bn€ to be cleansed. The banks in Portugal are still urged to tackle their NPL ratio, which stands at 9.4% above the limit imposed by the European Banking Authority.
Original story: ECO | Eco News
Photo: Free Images.com/Ricardo Gurgel
Edition & Translation:Prime Yield