Improving performance

Despite political turmoil, NPL levels are coming down in Europe.

Eurozone banks have seen their non-performing loan ratios fall steadily since 2016, resulting in an improving picture for the long-troubled economic bloc.

Regulators in Europe have been keen to reduce bank exposures to non-performing debt, with much of it being sold off to debt investors.

Italy’s banks remain the most exposed to bad loans and has been in political turmoil since elections in March. However, early signs suggest it newly installed government, made up of anti-establishment parties that are sceptical about the EU, has not put off investors.

The European Central Bank’s figures show a steady decline in non-performing loan levels throughout 2017.