Benvenuto sul sito del Ministero dell’Economia e delle Finanze, conosciuto anche come Portale mef

Contenuto principale

Actual weight of non-performing loans

 

The overall outlook for the non-performing loans (NPLs) of banks is improving. Bank of Italy data (Italian Version) as of 31 May 2016 show that:

  • The total NPLs before provisions (gross NPLs) amount to €360 billion: in the fourth quarter of 2015, gross NPLs decreased in absolute value for the first time since 2008 and the ratio of gross doubtful loans to total loans stabilised.
  • The total gross NPLs can be subdivided into i) probable default or past-due or overdue exposure (categories for which the return to “performing” status is possible), which amount to €160 billion, and ii) non-performing or “bad” loans (those with insolvent counterparties), which amount to €200 billion; both totals are gross values, and thus they do not reflect the actual weight of these positions on bank balance sheets.
  • The weight of non-performing loans on bank balance sheets does not correspond to the nominal value of the loans because the banks have already written down the amounts of the loans or taken provisions against losses in their financial statements; the net bad loans thus amount to €85 billion, or a decrease of €2 billion compared with 31 December 2015.
  • The €85 billion of net bad loans are backed by guarantees and collateral amounting to €122 billion.
(Source: Bank of Italy, Supplement to the Money and Banks Bulletin- July 2016, data as of 31/05/2016)
(Source: Bank of Italy, Supplement to the Money and Banks Bulletin- July 2016, data as of 31/05/2016)

 

The rates of recovery of non-performing loans actually observed, including during recent years, are in line with the valuations used in bank financial statements.
The economic recovery registered as from 2015 is surely one of the factors that has favoured the decrease of the non-performing loans. According to the Italian Banking Association-Cerved outlook of May 2016, the total of the non-performing loans in 2017 should get close to the pre-crisis levels, hitting nonetheless the lowest point since 2009.

(Source: Italian Banking Association Monthly Report – April 2016)

 

Non-performing loans (€ bn)
(Source: Bank of Italy, Supplement to the Money and Banks Bulletin-July 2016, data as of 31/05/2016)
  Gross exposure Net exposure
Total NPLs including bad loans 360 197
Bad loans 200 85
Net bad loans and collateral (€ bn)
(Source: Bank of Italy, Supplement to the Money and Banks Bulletin-July 2016, data as of 31/05/2016)
  Net exposure Collateral
Bad loans 85 122