Non-performing loans (NPLs) are on the rise. New regulations constrain capital usage. And in the background, the lingering effects of the credit crunch still squeeze balance sheets and bottom lines.
While the European Banking Authority still reported a €658 billion total NPL value at the end of 2018, NPLs are definitely in decline across Europe. The ratio of non-performing to performing loans has halved since 2014.
Further economic slowdown could stall this progress. So, it’s important for banks to manage the NPLs they have on their books, retaining the momentum the last few years have built.