Share the article
twitter-iconcopy-link-iconprint-icon
share-icon

NPL woes continue for European lenders

Asset quality in Greece deteriorated sharply, while remaining weak in Spain, Ireland and Slovenia. By contrast, non-performing loans are falling steadily in the US.
Share the article
twitter-iconcopy-link-iconprint-icon
share-icon

Non-performing loan (NPL) ratios say as much about honesty as they do about asset quality. Banks in the most troubled jurisdictions are often the most coy about disclosing NPL numbers, and the long-standing question-marks over Chinese asset quality also show that there are many ways to keep bad loans off the reported balance sheet. However, about two-thirds of banks in the Top 1000 have reported NPL numbers, and the banks with the poorest asset quality are generally in markets whose challenges are well known.

In 2011, the massive losses at Greek banks were mainly due to the restructuring of sovereign debt, and only one bank, Attica, featured among the top 25 highest NPL ratios. However, four consecutive years of recession have taken their toll on loan assets as well, and NPL ratios at the top four Greek banks doubled in this year’s ranking, pushing all four into the top 25.

To continue reading, join our community and benefit from

  • In-depth coverage across key markets
  • Comments from financial leaders and policymakers worldwide
  • Regional/country bank rankings and awards
Activate your free trial