Nonperforming loans soared in 2012, with bank officials estimating the rise at some 50 percent on an annual basis.
Officials say that NPLs came close to 24 percent of all loans at the end of December, from 16 percent in December 2011, while all bad loans come to a considerable 55 billion euros. This means that the sum of NPLs exceeds the total of the funds set aside for the recapitalization of the local credit system, which amount to 50 billion.
Nevertheless, there has been a notable improvement in economic conditions that is reflected in the significant slowdown in the rate of creation of new bad loans.
However, unless the growth of new NPLs is contained, banks may need yet another recapitalization process at the end of 2013, the same sources say.