BELGRADE (Serbia), Nov. 5 (SeeNews) – The ratio of non-performing loans (NPLs) to total loans in the Serbian banking sector fell to 3.5% at the end of August, supported by auctions for their sale and regulatory reforms, Ognjen Popovic, an adviser to Finance Minister Sinisa Mali said on Friday.
“A drastic drop in NPLs has been achieved as a result of an overall change in the legal framework, as well as the strengthening of institutions and the adoption of statutes, which have enabled banks and other financial institutions to solve this problem” Popovic said. in a press release issued by the Ministry of Finance.
The NPL ratio in the Serbian banking system fell to 3.6% at the end of June, from 3.9% in March 2021 and 3.7% in June 2020, the Serbian central bank announced last month.
The sale of two NPL portfolios in 2019 and 2021 further contributed to the reduction of the NPL ratio and allowed the banks to focus on their core business, as the management of huge receivables requires enormous human resources, Popovic said.
“It is an effective way to entrust this work to people who take care of it with professionalism, to speed up the process and to return as soon as possible the real estate and all other forms of goods which have been frozen to the economic flows. . In this way, we unlock growth and raise the standard of living of citizens, ”he noted.
The central bank of Serbia began to monitor non-performing loans regularly in 2008. After a temporary decline in the second half of 2012, the ratio of non-performing loans rose again in 2013 and continued to grow in 2014, reaching a record high by 22.5% in 2015.