DBRS: What’s Next For European Banks’ NPLs

DBRS Ratings Limited (DBRS) published a new commentary analysing European banks’ Non-Performing Loans.

In spite of a significant reduction in the last four years, some European banks still have an elevated stock of Non-Performing loans (NPLs). Progress has been most notable in Spain and Ireland, whilst Italy, Portugal and Greece still have NPL ratios much higher than the average of European banks.
• Most banks in countries with still high NPLs have announced specific NPL ratio targets for the next two to three years.
• However, NPL targets and timelines vary among banks and countries.
• System-wide solutions to accelerate the reduction of very high NPLs in Greece are being explored but are not likely to finalise before end-2019.