Non-performing loans (NPLs)

Non-performing loans, or “NPLs”, are bank loans that are subject to late repayment or are unlikely to be repaid by the borrower.
The inability of borrowers to pay back their loans was aggravated during the financial crisis and the subsequent recessions. As a result, many banks saw a build-up of NPLs in their books. This was particularly acute in some EU countries.
While the average ratio of NPLs in the EU has decreased by more than one third since 2014, the total volume of NPLs remains high and some countries are making only slow progress in reducing them. High levels of NPLs can weigh on the economic growth of those countries as they reduce banks’ profitability and their ability to lend, particularly to SMEs.

EBA REPORT ON NPLs 2020

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