Europe’s economy will not be firing on all cylinders until its banking sector has resolved ongoing problems with non-performing loans (NPLs), according to the CEO of a major European bank.
Speaking at the entire world Economic Forum (WEF) in Davos, Switzerland, ING chief executive Ralph Hamers told CNBC on Wednesday: “Some of them are still soul-searching. Until which can be truly over I think which we are not truly there in addition to banks will not be the real push for economic growth.”
NPLs have been a burden for banks — most notably from the European Union’s southern countries — since the global financial crisis, as businesses struggle to pay back their debt.
The process of reducing the holdings of NPLs among those same banks can be widely seen as integral to boosting economic strength in Europe. which could also likely help complete a banking union, the bloc’s flagship project to protect itself against future financial crises.
When asked what he believed was a priority for the European banking sector at present, Hamers replied: “We truly have to finish the European banking union.”