FRANKFURT (Reuters) – Euro zone banks are still seeing a “high” number of loans go unpaid and borrowers declare default despite years of economic growth, the European Central Bank’s top supervisor Andrea Enria said on Friday.
“It seems that inflows of new NPLs are still on the high side – not least when you consider where we are in the business cycle,” Enria said, referring to new non-performing loans (NPLs).
“It also seems that some banks with high NPLs are still reporting increasing default rates. We find this somewhat worrying, and we urge banks to stem this inflow by rethinking their underwriting standards and engaging with distressed debtors,” he added.
(Reporting By Francesco Canepa; Editing by Balazs Koranyi)