European non-performing loan barometer

 

The PwC NPL Barometer is an analysis of the level of non-performing loans (NPLs) and associated provisions across key Western European financial markets.

 

The analysis shows the extent to which NPLs have increased as a result of the financial crisis, with consumers and corporates struggling to repay debts.

 

The analysis is based upon publicly available financial data, and provides coverage of approximately 75% of banks within each of the following regions:

  • Belgium
  • Germany
  • Ireland
  • Italy
  • Portugal
  • Spain
  • United Kingdom

 

NPLs of the countries in our scope stood at over €160bn in 2007 increasing to over €500bn in 2010. Prior to the financial crisis, NPL’s in December 2007 represented 2% of total lending with provision coverage being 84% by June 2010 NPLs stood at 5% of total lending with a provision coverage ratio of 50%.

 

This implies that even though NPLs have more than doubled since 2007 provisions have not increased at the same rate.