Euro zone bank profitability collapses in second quarter, ECB says

FILE PHOTO: The headquarters of the European Central Bank (ECB) are pictured in Frankfurt, Germany, July 8, 2020. REUTERS/Ralph Orlowski/File Photo

FRANKFURT (Reuters) - Profitability among the euro zone’s biggest banks collapsed in the second quarter even as lenders still managed to keep their stock of non performing loans down, the European Central Bank said on Tuesday.

Return on equity in the first half of the year, the height of the coronavirus pandemic was 0.01%, well down from 6.01% a year earlier, with at least seven of the 19 euro zone countries showing negative returns, the ECB said in quarterly statistics.

The stock on non-performing loans meanwhile was 503 billion euros, not far from the 501 billion three months earlier, most likely as loan moratoriums and state guarantees helped banks keep loans classified as performing.

Reporting by Balazs Koranyi; Editing by Alison Williams