But we also need to emphasise the position of certain households that are potentially at risk. About a third of households have mortgages, and one tenth of those are quite deeply in debt, already spending over half their disposable income on servicing their mortgage. These people are vulnerable to interest rates rising, property prices falling, or their employment positions becoming more fragile.
Progress was made since 2015 in putting in place new banking legislation that brings Bosnia and Herzegovina banking system closer to European standards. Still, there is a lot of work to be done to resolve issues from the past financial crisis. At more than 11 percent of total loans, NPLs continue to burden the balance sheets of banks.