Presumably, the official non-performing loan ratio for Q1, when it is finally released, will exceed the 0.95% year-end 2012 figure.
"The bank's capacity to generate profit enables us to set aside hefty real estate provisions in Spain in 2012 and significantly increase non-performing loan coverage, " Santander chairman Emilio Botin said.
This distribution, combined with efficient collection systems has resulted in a non-performing loan rate of 5.5% as of Sept. 30, which is actually an improvement over the 12.3 % from the year prior and well below the consumer finance banking average in Mexico.
FSA's top management is intent on hiding the true picture of the non-performing-loan problem.
How, Chaturon asks, could the central bank governor launch an investigation into the non-performing-loan scandal at Krung Thai Bank last year when he used to be chairman of that state-owned institution.
Some of those non-performing loans will be directed into one of the many foreclosure alternatives now available to lenders: from loan modification to short sale to even sale of the loan at a discount to another entity who then can try to get that loan performing again.
She recommended that loans scheduled to reset to unaffordable levels remain at their original rates, on the ground that a modified loan that is performing, even at a lower rate, generally costs a lender less than putting a property in foreclosure.
He said worries about non-performing loans are overblown and that loan growth will accelerate in the second half of this year, having plunged 37% year-over-year during the first half of 2010.
Private equity groups seeking deals have targeted 20% to 60% discounts on the loan sales, buying collections of low-quality, performing and non-performing loans, according to DTZ.
Singapore's banks were relatively cautious in this regard, but even they are having to boost loan-loss reserves to account for the increasing number of non-performing loans.
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