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The Guardian - UK
The Guardian - UK
Business
Julia Kollewe

Eurozone banks starting to show ‘stress’ as loan defaults rise, ECB warns

the ECB HQ in Frankfurt, Germany
Luis de Guindos, the ECB’s vice-president, said personal incomes and company revenues ‘may suffer an additional squeeze if economic activity disappoints further.’ Photograph: Andre Pain/AFP/Getty Images

The balance sheets of eurozone banks are showing “early signs of stress” after a rise in loan defaults and late payments by customers, the European Central Bank has warned.

Higher interest rates have boosted banks’ income and profits for the time being, the ECB said, but lenders are facing pressures from higher funding costs, worsening asset quality and lower lending volumes.

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