East European Bankers Warn Bad Debt Thwarts Credit Recovery

Bad debt in eastern Europe, already exceeding a third of all lending in several countries, will stay at high levels and cast a pall over hopes of restoring credit growth, according to the region’s leading bankers.

Ukraine and Kazakhstan have the highest rates of loan delinquency at 33 percent and 35 percent respectively, according to data presented yesterday by UniCredit SpA, the biggest western lender in the region by assets. In Hungary, 20 percent of banks’ loan books are non-performing, while in Romania the figure is 26 percent. In Poland, which comes from a lower level, they have started to rise, UniCredit said.