Research Discussion Papers, Bank of Finland
No 10/1993:
Banks' Nonperforming Assets and Write-Offs in 1992
Johanna Pensala and Heikki Solttila
Abstract: In this paper we present data collected by the banking
supervision authorities on banks' nonperforming assets and loan losses with
a view to establishing a consistent database for analysing the condition of
Finnish banks and firms. Over the past couple of years some FIM 100
billion's worth of banks' exposures have been nonperforming, for shorter or
longer periods of time. At the end of 1992 banks' nonperforming assets
amounted to FIM 55 billion, after writeoffs of FIM 22 billion for the year.
Firms in the domestic sector of the economy are facing the most difficult
debt-servicing problems; nonperforming assets amounted to some 15 per cent
of exposures on average. For manufacturing firms, the figure was less than
five per cent. The relatively stronger position of manufacturing firms is
also clearly seen in the breakdown of loan losses by industry. These firms
accounted for only just over 10 per cent of loan losses attributable to
domestic firms. Construction and real estate business accounted for 45 per
cent of the total. Although a fifth of nonperforrning loans were accounted
for by households, these loans have not caused the banks' loan losses to
any great extent so far. In 1992 they accounted for less than seven per
cent of the total.
Keywords: nonperforming assets; loan losses; (follow links to similar papers)
23 pages, June 1, 1993
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