Dear customers, for your convenience we will apply dual display of the amounts related to your debts, as well as the prices of DCA assets listed for sale until the end of 2026. You can find more information by clicking the "See more" button.
See more

The countries with the most problematic loans in Europe

Until recently Bulgaria was among the top countries in Europe with largest share of bad loans. At the end of the first quarter of 2018, however, its performance compared to the pan-European picture improved significantly. Bulgaria has reached 9.58% and is already seventh in Europe. Greece continues to be in the top position with a share of over 45% of bad loans, followed by Cyprus and Portugal. Italy is still the hot spot of the European banking system because of its large debt volume. Ireland and Slovenia are also in the problematic zone. Bulgaria, even with its sustained improvement, and Romania (6.16%) are still far from reaching the 5% ceiling.

[infogram id=”023b5f5f-9210-4fa8-93ab-4a07f3fc5d47″ prefix=”WQH” format=”interactive” title=”npl europe”]

The trend in Bulgaria is, however, positive and sustainable – at the end of June, the share of bad loans has already reached to 9.44%, according to the latest published central bank statistics. According to the report, there is a tendency to improve asset quality due to a steady decline in the share of NPLs and advances and restructured loans. This is primarily due to the reduction in the gross and net worth of NPLs. The indicators improve in both segments – corporate and consumer loans.

At the end of June 2018, non-performing corporate loans decreased to BGN 5.56 billion from BGN 6.79 billion a year ago. In the consumer credit segment for three months, NPLs decreased to BGN 688.7 million from BGN 705.1 million, while mortgages increased by BGN 725.6 million compared to BGN 593.4 million at the end of March 2018.

Considering the upcoming large portfolio deals by the end of the year, the the bad loans ratio is expected to continue decreasing.

The bigger picture

Italy and Greece remain the hottest points in the banking system in Europe with respectively 10.8% and 45.3% of bad loans in the total credit portfolio of the countries. While in Italy the situation seems to be more optimistic (0.3% improvement for the first quarter of 2018), in Greece the problem seems to have grown  from January to March. Currently NPLs in Greece are nearly EUR 100 billion or about 10% of all non-performing loans in the euro area.