European
banks have accumulated a record number of loans for which repayment is highly
uncertain. A study by a renowned auditing group says the situation is
particularly precarious in the southern eurozone nations.
The total
value of toxic loans in European banks has doubled since the outbreak of the
global financial crisis in 2008, auditing company PricewaterhouseCoopers (PwC)
reported on Wednesday. It said lenders on the continent currently held
non-performing loans to the tune of 1.05 trillion euros ($1.85 trillion), not
knowing how much of would ever be paid back by debtors.
The
situation appeared worst in the eurozone's southern European nations which had
been worst hit by a bursting real-estate bubble and the ensuing debt crisis,
PwC claimed.
In Greece
alone, the nominal value of toxic credits rose by almost 50 percent to 40
billion euros last year, compared with 2010 levels. Spain saw a 2011 rise in
bad loans by 23 percent to reach 136 billion euros, while neighboring Italy
logged a 37-percent increase to 107 billion euros.
Loans hard
to get rid off
"The
poor economic development in southern Europe led to more payment defaults last
year, and that was to be expected," PwC's Markus Burghardt said in a
statement.
The report indicated
that Germany's lenders were stuck with the biggest individual amount of bad
loans, equivalent to 196 billion euros. But Germany joined lenders in Britain
and France, whose toxic credits had not increased since 2010.
European
lenders have generally been facing problems to sell non-performing loans to
customers. This has meant that banks across the continent have had to make
bigger annual provisions which have weighed down on their net profit.
hg/ rc (Reuters, dapd, dpa)
No comments:
Post a Comment
Note: Only a member of this blog may post a comment.