Source: Novosti | Thursday, 15.12.2016.| 15:29
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Corporate clients paying off installments – NPLs of enterprises reduced by about 3%

(Photo: love work 51/shutterstock.com)
There are increasingly fewer non-performing loans in Serbia, and the main reason for this is the economic growth. According to the National Bank of Serbia, NPLs currently amount to 18.7% and are lower by 3% compared to late 2015. Thanks to measures taken by the NBS, the Government and the banks, NPLs have been brought down to the 2013 level. The sectors in which the reduction in NPLs is the quickest are construction, agriculture, industry and trade, at the same time the sectors recording the quickest progress.

Increased dinar debts, arising from favorable loans taken out by enterprises, have contributed to an easier loan repayment. Until recently, most companies took out loans in euros, due to lower interest rates. Now that the banks have adjusted their dinar loan prices, businessmen can incur debt in the local currency under favorable conditions as well. This has lead to a growth in dinar loans to companies by 25%.

– The average interest rate on dinar loans taken out by enterprises is 6% – the NBS says. – The most prominent price reduction is evident in investment loans, making them equal to working capital loans. The reduction of financing costs in the corporate sector contributes to improved business results, which further stimulates involvement in new investment projects.

According to banks, corporate loan conditions are more favorable due to lower margins and accompanying costs, along with longer repayment periods. Corporate loan demands are growing, both for working capital financing and debt restructuring.

All of this contributes to the reduction of NPLs. Banks are prepared to write-off NPLs in order to clean their balances.
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