The European Central Bank (ECB) has decided to increase supervisory fees by nearly 12% this year to pay for the additional cost related to the Brexit, UK’s imminent departure from European Union.

In a statement ECB said that this year the banks will pay €474.8m as fees, compared to €425m a year earlier.

The central bank of Europe is planning to spend €502.5m on supervision this year which will include the remaining unused amount from the last year.

Besides Brexit, ECB has attributed several factors for this increase. The amount will also be utilised to carry out the European Banking Authority’s biennial supervisory stress tests for major banks in this year.

In another development, ECB published new data for the last quarter of 2017 that found euro zone banks were able to reduce the amount of bad debt compared to the same period a year ago , reported Reuters.

Non-performing loans at these banks dropped to €721bn from €759bn.

Addressing bad debts was one of the main priorities of ECB as it was hindering the banks from lending to the real economy.

The ratio of non-performing loans decreased to less than 5% in the recent years but it continues to remain high is some specific countries such as Italy, Portugal and Greece.