Banks in the euro area amassed the largest amount of bad loans ever, the economic auditing firm Ernst & Young revealed in a study released on Monday.

It estimated that credits to the tune of 918 billion euros ($1.23 trillion) were currently not being paid back at all or could only partly be paid back, amounting to 7.6 percent of all loans granted in the eurozone.

In Spain, 15.5 percent of loans fall into that category, while it's 10.2 percent in neighboring Italy. German lenders for their part only sit on 2.7 percent of bad loans.

"That is likely first and foremost attributable to strong a robust domestic economy," Ernst & Young managing partner Claus-Peter Wagner said in a statement.

Positive earnings outlook

While the situation in Germany is expected to improve even further in the course of this year, the prospects for crisis-stricken southern European nations in 2013 appear gloomy.

Pressures will only ease in 2014. But that'll not be because of enhanced payment morale or an economic uptick in the whole eurozone, but rather because of the setting up of so called "bad banks" which serve to absorb such loans.

Data provided by Ernst & Young also showed the volume of loans granted to clients in the bloc looked set to stagnate for quite some time to come. The auditors said new real-estate loans would even fall by 0.6 percent in the course of this year despite lenders expected to see their profits rise by some 3 percent in 2013.

hg/pfd (Reuters, dpa)