The non-performing loan (NPL) ratio within the Portuguese banking sector decreased to 3.6% at the end of 2021, 0.4 percentage points less than in September and 1.3 percentage points below 2020, the BdP said.

According to the latest report from the Bank of Portugal (BdP) on the Portuguese banking system for the fourth quarter of 2021, the gross NPL ratio decreased 0.4 percentage points from the previous quarter to 3.6 percent, reflecting the decrease in NPLs and the increase in productive loans, with contributions of -0.3 percentage points and -0.1 percentage points, respectively. The NPL ratio net of impairments stood at 1.7% (1.8% in September 2021).

Data released by the BdP indicate that the gross value of NPL owned by Portuguese banks fell by €1.012 billion between September and December 2021, standing at €12.032 billion at the end of last year. In year-on-year terms, the decrease in the value of NPL was €2.384 billion.

Net of impairments, NPL totalled €5.747 billion at the end of 2021, down from €5.775 billion in September and €6.494 billion year-on-year. According to the BdP, the gross NPL ratios of companies (non-financial corporations – NFCs) and individuals stood at 8.1% (-0.3 percentage points) and 2.8% (-0.2 percentage points), respectively, with their variation “reflecting, in particular, the reduction in NPLs”.

The NPL coverage ratio by impairments decreased 3.5 percentage points in relation to the previous quarter, to 52.2%, reflecting “the decrease in accumulated impairments, partially offset by the reduction in NPLs”.

In companies there was a decrease of 3.8 percentage points, to 52.9%, while in individuals the coverage ratio fell to 50.9%, with an increase of 0.3 percentage points in consumption and other purposes, to 64.8%, and a decrease of 1.5 percentage points in the housing segment, to 32.6%.

Original story: ECO| Lusa 
Photo: Photo by Svilen Milev on FreeImages
Translation and Edition: Prime Yield