NPL&REO News

Total NPL stock down by €7.2 billion since September 2024

19 December, 2025

According to the latest European Risk Dashboard from the European Central Bank, the total stock of non-performing loans (NPL) held by Spanish banks has fallen by €7.2 billion over the last year. Despite this positive trend, Spain still has the second-highest volume of non-performing loans in the European Union after France, which has €126.9 billion.

At the end of the third quarter of 2024, Spain’s largest banks had €69 billion of non-performing loans on their balance sheets — €7.2 billion less than the €76.2 billion reported in the same quarter of the previous year — representing a 9.45% reduction over that period.

Compared to the €70.4 billion recorded at the end of June, the quarterly evolution shows a 2% reduction in this indicator.

Reflecting the improving quality of assets held by banks, the NPL ratio has also evolved positively, falling by 0.3 percentage points (pp) from 2.8% in Q3 2024 to 2.5% currently. Compared to the previous quarter (2.6%), the reduction was 0.1 percentage points.

NPL stock shrinks 16% in the last year

19 December, 2025

According to the latest data from the European Central Bank, the total volume of non-performing loans (NPL) in the Portuguese banking system fell by 16% in the last year, with the NPL ratio falling by 0.4 percentage points (pp) in the third quarter of 2025 compared to the same period last year.

The European Central Bank has released its European Risk Dashboard for Q3 2025, which confirms the ongoing improvement in the soundness of Portuguese banks. At the end of September, national banks held €4.2 billion of non-performing loans, which is a 16% decrease compared to the €5 billion recorded in the same period last year.

The quarterly trend was also positive, with non-performing loans falling by 2%, from €4.3 billion in the quarter ending in June to €4.2 billion in the quarter ending in September.

The NPL ratio fell by 0.4 percentage points from 2.4% at the end of September 2024 to close the third quarter at 2%. Compared to the previous quarter (2.1%), the decrease was 0.1 percentage points.

Source: EBA
Edition and translation: Prime Yield

Banks ‘clean up’ €1.1 billion in NPLs from their balance sheets

18 December, 2025

The main Greek banks are continuing to make progress in reducing the bad debts on their balance sheets. They closed the third quarter of the year with a cumulative reduction of €1.1 billion compared to September 2024.

According to the European Central Bank’s latest European Risk Dashboard, Greece recorded an non-performing loans (NPL) volume of €5.7 billion in the third quarter of 2025, which is down 16% from the same period last year when the figure was €6.8 billion. This equates to a reduction of €1.1 billion over twelve months. Compared to the previous quarter, there was a decline of 3%, with the NPL stock falling by €200 million compared to the €5.9 billion recorded at the end of June 2025.

The NPL ratio also declined by 0.5 percentage points (p.p.), falling from 3.3% in September 2024 to 2.7% at the end of the third quarter of 2025. Despite the positive year-on-year performance, this figure remained unchanged from the previous quarter and still ranks as the third highest among European Union countries.

Source: European Central Bank
Edition and translation: Prime Yield

Bank of Portugal finalises guidelines to regulate the sale of NPL by banks

9 December, 2025

The Bank of Portugal released the final version of the guidelines that, as of next Wednesday (10th December), will regulate the new rules for the sale of bad debt by banks to non-financial entities.

The notice with the new guidelines was published in the Bank of Portugal’s Official Gazette and can be consulted on the regulator’s website.

The guidelines accompany the entry into force of the new Bank Credit Transfer and Management Regime, i.e. the rules on transactions in which financial institutions sell credit portfolios (generally non-performing) to third parties that are not financial entities and are not authorised to grant credit.

The new law, created in September by Decree-Law No. 103/2025, transposed into Portuguese law a European directive that should have been implemented almost two years ago, by 29 December 2023.

The new rules define the conditions that a bank must comply with in order to sell a bad debt to an external entity (usually investment funds) and the rules to be followed by the purchasing companies and the managers of the debts that are sold.

Since managers must be registered with the Bank of Portugal in order to carry out their activities and are subject to supervision by the central bank, the regulator’s notice defines the procedures to be followed by applicants to request this authorisation.

The text with the guidelines discloses the digital form template to be used and the documents that managers must submit to instruct applications to the BdP.

The notice also includes information on what elements must be sent to the BdP by credit managers authorised in Portugal who wish to carry out management activities in another European Union Member State.

The text also defines what information must be included in the public register of credit managers and what content must be included in communications sent by managers if they subcontract credit management activities.

The guidelines were finalised by the BdP after the draft notice was open for public consultation between 17 September and 29 October.

The directive on which the new credit transfer regime is based dates from 24 November 2021. The European text required European countries to transpose the new rules into national legislation by 29 December 2023. However, as Portugal is only now in the final stage of the legislative process, the Portuguese State faces infringement proceedings opened by the European Commission.

Original Story: Observador / Lusa
Photo: Image by Raten-Kauf from Pixabay
Translation & Edition:Prime Yield

Spanish banks strengthen coverage of non-performing loans and surpass French banks

9 December, 2025

The positive performance of non-performing loans in Spain over the last year has strengthened the financial position of banks, which, in addition to having a lower-risk loan portfolio, need fewer provisions to cover potential losses. This is a position of strength that increases their level of protection against non-performing loans. According to the latest risk panels from the European Banking Authority (EBA), Spanish financial institutions have increased their non-performing loan coverage ratio over the last year, reaching an average of 45.5% at the end of June, compared to 43.6% a year earlier. This slight increase allowed them to surpass French banks, whose ratio stood at 44.3% after falling slightly during the period.

This metric is calculated by dividing provisions by the volume of non-performing loans and reflects the proportion of non-performing loans that are covered by the provisions that a bank has set aside. The increase in coverage is due in practice to an improvement in credit quality, which also requires lower risk provisions. In other words, provisions (the numerator of the ratio) fall, but to a lesser extent than non-performing loans (the denominator), so that the coverage ratio ends up increasing.

Banks are taking advantage of this tailwind to cover themselves against potential unforeseen events in the future that could cause defaults to rebound. In other words, a higher ratio could serve as a shield to help them weather more difficult times. According to the latest data from the Bank of Spain, delinquency rose slightly in August from the previous month, to 2.93%, breaking with six months of continuous decline. However, the rate remains at its lowest level since 2008, staying below 3%.

Original Story: El Economista| Author: Matteo Allievi
Translation & Edition: Prime Yield

Greece Remains a Top Global Investment Choice for 2026

9 December, 2025

Greece continues its remarkable comeback on the global economic stage, emerging as a top investment destination for 2026. Major international financial institutions — including Morgan Stanley, JP Morgan, UBS, HSBC, Bank of America, Wood & Company, and Fitch — are “voting Greece” once again, citing strong fundamentals, sustained growth, upgraded credit ratings, and consistent market outperformance.

Once regarded as a struggling economy, Greece now stands as a European success story, firmly re-establishing its credibility in global portfolios and demonstrating a trajectory of stability, profitability, and fiscal discipline.

Fitch: Greece Leads Europe in Debt Reduction

Fitch’s latest outlook on Greece is highly optimistic. While Europe evolves into a “two-speed market,” Greece remains in the core group of fiscally strong economies.

According to Fitch, Greece will record Europe’s largest debt reduction from 2019–2026 — more than 40 percentage points of GDP — while maintaining surpluses and reducing fiscal pressures.

Morgan Stanley: Greece Stands on the ‘Top of Olympus’

Morgan Stanley forecasts two more years of strong economic growth, projecting 2% GDP growth in both 2026 and 2027 — well above the Eurozone average.

The bank argues that Greece is still structurally undervalued, with stock valuations failing to fully reflect improved fundamentals. It labels Greece one of the top EEMEA markets for 2026, noting that the country has evolved from an “emerging market stereotype” into a mature, reliable regional market.

JP Morgan: Greek Equities and Banks Among Top Global Picks

JP Morgan renews its confidence in Greek markets, predicting the MSCI Greece index will rise 16% in 2026 (in USD terms).

Bank of America & Wood & Company: Greece Holds Overweight Positions

Global EM funds continue to hold overweight exposure to Greece, according to Bank of America.

Wood & Company also places Greece among its most attractive markets for 2026, praising the country’s transition into a new era of investment normality and credibility.

UBS: Greece Still Trading at a Deep Discount

UBS identifies Greece as one of the few “cheap markets with strong fundamentals”, underscoring:

Fiscal stability
Strong banking sector
Attractive valuations

The bank notes that Greece still trades at a 40–50% discount to its historical valuation levels, meaning the market has not yet fully priced in the country’s multi-year economic improvement.

HSBC: Rising Global Portfolio Weight and Strong Bank Positions

HSBC highlights increasing fund inflows into Greece and a stronger weighting in global emerging-market portfolios. The bank calls Greece a “positive case” heading into 2026, driven largely by confidence in its banking sector.

Alpha Finance: Greece Eyes Developed-Market Status in 2026

Alpha Finance remains bullish on the Athens Stock Exchange. Despite recent gains, valuations continue to show a 30–40% discount versus Stoxx 600 and MSCI EM indices.

Greece’s expected upgrade to “Developed Market” status in September 2026 by FTSE Russell and S&P Dow Jones Indices — a milestone restoring Greece to the world’s advanced economies after 13 years. This shift is expected to bring increased liquidity and fresh institutional capital inflows.

Original Story: Greek City Times
Edition: Prime Yield

Defaults in the financial system records highest increase in three years

9 December, 2025

Delinquency in the Brazilian National Financial System (SFN) rose to 4% in October, according to data released by the Central Bank . The rate, which considers delays of more than 90 days, rose 0.1 percentage points in the month and 0.8 points in 12 months.
According to Central Bank data, this was the highest cumulative increase in a year since the beginning of 2022, when the indicator also recorded a sharp acceleration amid the onset of monetary tightening, when the Selic rate entered double digits.
In previous years, the behaviour was quite different. In 2023, the annual variation in default was moderate, ranging from +0.20 percentage points to +0.30 points, with no month exceeding this level.

In 2024, however, the trend was downward: all annual variations were negative or close to zero, ranging from -0.29 p.p. to -0.22 p.p., ending the year at -0.23 p.p. in December — a period marked by a reduction, rather than an increase, in default rates.

In 2025, however, the numbers continued to rise. In free credit, default remained at 5.3%, but still with a significant increase of 0.9 points in 12 months. Among households, the indicator stands at 6.7%, stable for the month, but 1.3 points above the level recorded in October last year. For businesses, free credit defaults rose to 3.3%.

SFN credit considers the total operations contracted by households and businesses, and the data show that individuals account for most of this debt.

According to the data, in October, balances totalled R$ 4.3 trillion for households, compared to R$ 2.6 trillion for companies, which means that households account for more than 60% of all credit in the financial system, increasing the weight of consumption and domestic financing in the debt structure.

Original Story: CNN Brasil | Author: Cristiane Noberto
Photo: BrunoNeves in FreeImages
Translation and Edition: Prime Yield

Unicre is selling Unibanco and wants to “clear up” €160 million of bad debt

2 December, 2025

With Unibanco about to be sold to Novobanco, Unicre placed a €160 million portfolio of non-performing loans (NPL) on the market with the aim of “cleaning up” its balance sheet.

According to a presentation of the process sent to potential interested parties and seen by ECO, Unicre is finalising the sale of its consumer credit and credit card unit to Novobanco and has placed a portfolio of bad debt worth approximately €160 million on the market.

In the so-called ‘Project Summit’, the financial institution — which is owned by the largest national banks — is selling almost 20,000 problematic loans, which were mostly taken out by individuals. These loans are unsecured, with an average value of €8,000 per contract and an average default period of around seven years.

According to the portfolio description, most of these loans were granted through credit cards (€108.6 million), although there are also personal loans (€48.8 million). The majority of cases (84%) are already in court.

The transaction is being conducted by Alantra and is expected to be finalised by the end of the year. At least, that is Unicre’s intention as it seeks to “clean up” its balance sheet by selling this portfolio. With the non-binding offer phase now closed, interested parties must submit firm bids. It was not possible to ascertain which funds are in the running.

Unicre is controlled by the main national banks, including BCP (31.16%), Santander Totta (21.86%), BPI (21.01%) and Novobanco (17.5%).

The sale of Unibanco is expected to be finalised in early 2026.

This transaction coincides with Unicre’s sale of its consumer credit and credit card business, operating under the Unibanco brand launched in 2011, to Novobanco. Announced last summer, the transaction is awaiting approval from the Competition Authority and is expected to be completed in the first quarter of next year.

As part of this transaction, Novobanco will acquire Unicre’s consumer credit portfolio, including credit cards, credit consolidation and personal credit, with a net value of €262 million. Novobanco will also acquire the Unibanco brand and other assets and liabilities associated with the consumer credit business unit.

Original Story: ECO | Author: Alberto Teixeira
Edition and translation: Prime Yield