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NBRM: Banking assets on the rise, loan portfolio deteriorates

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Liquidity of banking sector in Q2 of 2017 is considered to be at a satisfactory level. Total assets rose by 0.6 per cent as deposits increased to a minimum on quarterly basis.

An accelerated rise has been registered of Denar deposits compared to household deposits in foreign currencies, considered a signal of gradual restoration of trust and renewal of the process of ‘denarization’ of deposits, which was almost terminated in the Q2 of 2016 as a result of the political developments in the country, the National Bank of the Republic of Macedonia (NBRM) says Thursday.

The quality of loan portfolio, according to the NBRM Council, registers a slight downturn in this quarter. Total nonfunctional loans of the banking system have increased by 8.1%. The increase in participation of nonfunctional loans in total loans is concentrated in the corporate loan portfolio, where participation has reached a level of 10.6% as the participation of nonfunctional household loans in total household loans retains the same level, 2.5%. A continual rise in nonfunctional loans has been recorded in the final five quarters, the NBRM says.

The banking system in Q2 attained a high level of stability with the tendency to rise. Banks used a segment of liquidity assets to boost loan activity contributing to loans of non-financial subjects marking a growth of 2.2% as a result of long-term loans approved to households.

“Indicators for a profitable and efficient banking system mark further improvements and stand at a solid level. However, profits of the banking system throughout the year face a slowdown in comparison to the same period in 2016,” the NBRM says adding the banks keep reporting high rates of return of the average capital and of average assets from 12.7% to 1.4%.