Although, overall, European banks continued to improve the quality of their loan portfolios in the third quarter of 2017, the downwards tendency of the volume of non-performing loans (NPL) in the European banking sector is still modest, according to the results of the 'risk dashboard' published on Tuesday 16 January by the European Banking Authority (EBA).
At the end of 2017, the average ratio of NPL to total loans fell by 30 base points, to stand at 4.2%. This downwards trend was observed for banks of different sizes, particularly the smallest of them, which saw their ratios fall by 67 points to stand at 17%, the EIB states. “Although slowly, supervisory efforts are bearing their fruit”, it adds.
Even so, gaps between member states remain high, with ratios ranging from 0.9% in Sweden to 46.6% in Greece, and the total amount of NPL on banks' balance sheets, which has been put at €854.4 billion, continues to weigh down their viability, it explained.
This Thursday 18 January, when it presents its first progress report on the implementation of the action plan adopted in July by the member states (see EUROPE 11827), the Commission will have the opportunity to take stock, which is also an item on the agenda of the meeting of the European finance ministers on Tuesday 23 January. (Original version in French by Marion Fontana)