European NPL Market Update Q4 2021

Our latest European NPL Market Update Q4 2021 report draws on the most recent data from the European Banking Authority (EBA) and inputs from our local real estate experts across key European regions, which demonstrates that despite the initial sign of quicky recovery from COVID, the overall economic situation is increasingly uncertain where disrupted supply chains, rising commodity prices, driving inflation and eroding disposable income are creating material risk to the market.

The EU NPL ratio reached 2.0% in Q4 2021, a decrease from 2.5% in Q1 2021, mainly driven by a 7% decrease in NPLs and was more significant in countries with higher ratios.

Concerns start to emerge on the asset quality as government support measures have been removed gradually. Loans with existing moratoria dropped massively by 95% since 2021Q1, from €50bn in 2021Q3 to €12bn at the end of 2021, while total loans with expired moratoria reached €704bn. Non-performing loans with expired moratoria increased to 5.5% in the final quarter of last year, compared to 4.0% for the same period in 2020.

The report will also include country profiles outlining market conditions in the United Kingdom, Ireland, Greece, Spain, Italy, Portugal and Turkey.