Stock of Non-Performing Loans in Portugal Could Rise to 21 Billion Euros

15 February 2021

A study on the Portuguese banking system by the management consulting company Roland Berger has predicted that 30% to 45% of the loans currently covered by moratoria could default. If so, the bad debt ratio would increase by 5 to 7 per cent to between 10% and 12%.

Loans covered by the Covid-19 related moratoria account for 22% of the total stock of credit. The Munich-based consultancy estimates that Portugal’s volume of bad debts could increase by between 14 billion and 21 billion euros when the measure ends. The moratoria are currently in force until September 2021.

According to an article by the Jornal Económico, António Bernardo, a managing partner at Roland Berger stated that “our model, which was recently updated, says with 95% certainty that [the total] will be between that range of 14 to 21 billion euros.”

Original Story: Jornal de Negócios

Translation: Richard Turner