Fitch Ratings announced that Portuguese banks will absorb rise in impaired loans
- Portugal Business News - Valerie Charoux
- Feb 21, 2023
- 1 min read
Fitch Ratings has announced that Portuguese banks will be able to absorb the rise in impaired loans in 2023. The likely increase in impaired loans is due to the economic slowdown, high inflation and rising interest rates.
The ratings agency expects the sector’s impaired loans ratio to increase only modestly, partly due to tighter underwriting guidelines introduced in 2018. The sector’s impaired loans ratio was about 3.4% end of June 2022, according to Banco de Portugal, compared to a peak of about 18% end of June 2016.
Portugal's Central Bank 2018 macroprudential recommendations led to the near elimination of new residential mortgage lending with LTV ratios above 90%.
