More than 19% of loans and interest rates registered in banks'balance sheets were classified as "doubtful" and "loss" at the endof August, a new negative record for the deterioration of bankingportfolio quality," show NBR data.
The loans are the ones for which payment delays of above 60 dayshave accumulated and that are becoming ever more difficult torecoup amiably from debtors.
A year ago, the bad loan indicator stood at 13.3%, already doublethe level of late 2008. June had broken the constantly upward trendof the previous year, but July and August brought new bad loanpeaks, as SMEs coped with rising difficulties in paying back loansand public sector employees felt the first fallout of austeritymeasures.
Irrespective of the definition bad loans are given, the upwardtrend in the volume of overdue loans is obvious and there are nosigns it will lose momentum.
Thus, some banks are expected to need additional provisions in thelast part of the year, likely to prompt new capital increasedemands.
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