Empirical Evidence on Npls Resolution: Serbia and Cesee Countries

In past decade, joint impact of financial crisis and economic recessions, followed by inadequate loan disbursement practices, influenced on high NPLs ratios existence in certain countries. Negative effects of high NPL ratios on economic growth and credit lending activity signalized the necessity of urgent reaction in the direction of NPLs declining at satisfactory pace. This paper analyzes movements and trends in NPLs stock as a consequence of successful resolution of NPLs issue in Serbia and selected CESEE countries. Simultaneously, the paper highlights benefits, which are derived from successful implementation of NPLs resolution strategy, as well as the significance of preventing NPLs accumulation in financial systems. Due to avoidance of future emergence of new NPLs in significant extent (which could seriously deteriorate the stability of banking systems), authors concluded that within observed countries has been created a positive economic environment and sufficient incentives for further credit lending activity growth in prospective period.