EC Issues First Progress Report on Reduction of NPLs in EU Banks
EC published the first progress report on tackling nonperforming loans (NPLs) in the EU. EC welcomed the headway made in tackling NPLs in the EU, as part of ongoing work at the national and the EU level. This is the first progress report since the Finance Ministers agreed on an Action Plan on reducing NPLs.
The report highlights improvement in NPL ratios and forthcoming measures to bring NPL stocks down further. It shows that the positive trend of falling NPL ratios and growing coverage ratios has solidified and continued into the second half of 2017. NPL ratios have been falling in nearly all member states, although the situation differs significantly across member states. The overall NPL ratio in the EU declined to 4.6% (in the second quarter of 2017), down by roughly one percentage point year-on-year and by a third since the fourth quarter of 2014. The report also shows that the EU is on track with implementing the Action Plan of the European Council.
Valdis Dombrovskis, Vice-President for Financial Stability, Financial Services and Capital Markets Union said: "Getting the level of NPLs down is essential to reducing risks in the banking sector and completing the Banking Union. Concerted efforts by banks, supervisors, Member States, and Commission have already borne fruits. But we need to forge ahead to further bring down NPL levels. We want banks in all EU countries to regain their full capacity to lend to companies and households while preventing build-up of new bad loans."
Press Release
Keywords: Europe EU, Banking, NPLs, Action Plan, Banking Union, EC
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