Banco ABC Brazil reported significant increase of renegotiated loans
in the period that accounted for 3.
3% as at December 2011; relevant ratios would be much higher when taking into account the renegotiated loans
, which are not classified as impaired.
The substantial increase seen in renegotiated loans
(around RUB300bn) is also worrying.
Non-performing loans (NPLs) rose further in 2014 and into the first half of the current year and renegotiated loans
Although Fitch views the concept underlying the payroll deductible loan product positively, as direct-deduction monthly loan installments from the borrower's salary or benefits eliminates the risk associated with a borrower's willingness to pay, there are a number of additional risks, including: operational problems and limitations for originating payroll deductible loans; increased competition among lending financial institutions; levels of renegotiated loans
that present payment problems due to operational issues; increasing prepayment and refinancing rates; and capital structures of securitization programs and the purchase rates used for acquisition of the loans.
ASSET QUALITY AND AS OF AS OF AS OF OTHER DATA ($000s) 3/31/2004 6/30/2004 12/31/2003 Nonaccrual Loans $11,583 $10,690 $13,673 Renegotiated Loans
- - - Other Real Estate Owned 616 747 735 Total Nonperforming Assets 12,199 11,437 14,408 Loans 90+ Days Past Due & Still Accruing 258 195 318 NPAs plus Loans over 90 $12,457 $11,632 $14,726 rather than: ASSET QUALITY AND AS OF AS OF AS OF OTHER DATA ($000s) 3/31/2004 6/30/2004 12/31/2003 Nonaccrual Loans $11,583 $11,297 $13,673 Renegotiated Loans
- - - Other Real Estate Owned 616 747 735 Total Nonperforming Assets 12,199 12,044 14,408 Loans 90+ Days Past Due & Still Accruing 258 195 318 NPAs plus Loans over 90 $12,457 $12,239 $14,726 as originally issued inadvertently.
increased because one commercial loan of approximately $4.
Although the rate of increase of NPLs slowed down in 2014, the NPL ratio rose further at the same time that the volume of renegotiated loans
continued to increase.
The Bank's FSR is constrained by a high level of NPLs, which remained above the industry average in the first nine months of 2014, despite the decline mainly as a result of renegotiated loans
, nonaccrual loans, and other real estate owned.
The FSR is nevertheless constrained by the still high level of non-performing loans (NPLs), which remained moderately above the banking sector average despite the higher amount of renegotiated loans
Nonaccrual assets, renegotiated loans
and other real estate acquired in foreclosure were $4.