Eurozone banks are reducing their stock of bad loans despite the looming recession.

The ECB has long warned that an economic slowdown combined with skyrocketing interest rates can only hurt creditors, who still appear complacent, especially when it comes to building provisions and recognizing bad debts.

But so far the hard data shows no dramatic changes, with banks’ stock of non-performing loans falling to 2.29% in the third quarter from 2.35% three months earlier, according to the latest monitoring data.

From over 900 billion euros after the bloc’s debt crisis almost a decade ago, non-performing loans are now down to 348 billion euros, the lowest level since the ECB began collecting data in 2015.

But in potential evidence of the ECB’s concerns, write-downs and provisions actually fell in the first three quarters of the year, from €37.1 billion a year earlier to €36.9 billion.

This may need to change as rising energy prices drain the bloc’s purchasing power and a recession over the winter months is almost certain.

Meanwhile, banks’ total capital ratio has worsened slightly from 18.86% three months earlier to 18.68%.

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