Eurozone banks shed €30bn of NPL in 3rdquarter

The euro zone’s top banks shed some € 30 billion worth of unpaid loans (NPL) in the third quarter of 2018, in a new sign that European Central Bank pressure to clean up their balance sheets is bearing fruit.

The ECB wants banks to sell or provision for the bad debt they’ve inherited from the last recession so they can focus on extending fresh credit and are better prepared to withstand any new downturn.

ECB data showed NPL and advances held by the euro zone’s 107 top banks fell to € 627.7 billion, or 4.17% of the total, in the three months to September.

That was down from € 657.15 billion, or 4.40% of the total, and the end of the second quarter.

Large falls were seen in Cyprus, Italy, Greece, Portugal and Spain, and also in Germany. Even though, soured credit inherited from the last recession still accounted for a fifth of the loan book of Cypriot banks and for 40% of bank credit in Greece.

Original Story:Reuters | Francesco Canepa
Photo: Szymon
Edition:Prime Yield