...Asset Quality Stabilisation in CEE NPL* inflows subsided in 2014 and 1H15, but portfolio cleaning is being hampered by obstacles to NPL resolution in most CEE** markets. At end-1H15, total NPLs equalled almost EUR48bn (end-2011: EUR47bn). The NPL ratio was close to 20% in BUL and SLN, about 13% in HUN and ROM and above 5% in POL, CZK and SLV. Asset-quality metrics deteriorated in BUL in 2015 due to a more conservative NPL definition. Unreserved sector NPLs represent a relatively low or moderate proportion of equity in most CEE markets, except BUL (where lower coverage is offset by relatively high capital ratios). The asset quality review in BUL (planned in 2016) may result in higher coverage by provisions. Ongoing but Slow Resolution of NPLs Slow resolution of legacy NPL stocks is holding back loan growth in banking sectors with high NPL ratios, particularly in countries also suffering from deleveraging pressures after previous rapid growth (HUN, BUL and SLN). Legacy bad debts remain material...
