At any rate, bearing in mind the economic outlook for the foreseeable future and progress of structural reform, we should anticipate that, at least for some time to come, there is the risk new NPLs will emerge and existing NPLs further deteriorate.
In this regard, it is critical that financial institutions are well prepared for such risks and review in a timely fashion their classification of borrowers and collateral conditions, and make appropriate provisions. Removal of non-performing loans from the balance sheet As a matter of course, increasing provisioning is not enough to overcome the NPL problem.