Bank Default hits record high in Brazil

29 May, 2026

The average nonperforming loans (NPL) rate within Brazil’s financial system rose to 4.4% in April, the highest level in the revised historical series maintained by the Central Bank of Brazil since 2011. The figure matches reinforces the trend of deteriorating credit quality across the country. The data were published on Thursday (28) in the Central Bank’s Monetary and Credit Statistics report.

The indicator covers loans and credit operations with payments overdue by more than 90 days, including both households and businesses.

The new peak comes just ahead of the implementation of Desenrola 2.0, the federal debt renegotiation programme aimed at indebted consumers, launched in May.

Among individuals, the default rate increased from 5.3% in March to 5.4% in April, the highest level since May 2012. The increase highlights mounting pressure on household budgets in an environment characterised by expensive credit and a high proportion of income committed to debt repayments.

Among businesses, the default rate remained unchanged at 2.8%, the same level recorded in March. Even so, this marks the highest rate since 2018, indicating that repayment difficulties are also spreading through the corporate sector, albeit at a more moderate pace.

High Indebtedness Maintains Pressure

Central Bank data also show that household indebtedness remains at historically elevated levels. In April, the ratio of household debt to cumulative income over the previous 12 months stood at 49.8%, virtually unchanged from March (49.9%), but significantly above the series average of 41.9%.

According to Serasa Experian, around 82.8 million Brazilians were in debt in March, equivalent to 49% of the population. Nearly half of these debts are concentrated within the financial sector, which is directly targeted by the new debt renegotiation programme.

Credit Expands, but Costs Remain High

Despite the rise in defaults, the volume of credit in Brazil continues to grow. The total credit stock of the National Financial System reached BRL 7.2 trillion in April, up 0.3% on the month and 9.3% year-on-year.

Credit extended to households totalled BRL 4.6 trillion, while lending to businesses stood at BRL 2.7 trillion.

New credit issuance also continued to increase, reaching BRL 691.5 billion during the month. However, borrowing costs remain elevated: the average lending rate on new credit operations reached 33.8% per annum, while unsecured lending to individuals climbed to 63% per annum.

Credit Expansion and Rising Risk

Despite continued growth in credit and broader monetary aggregates, the indicators suggest that the financial system is entering a phase of greater caution. Credit expansion has not been sufficient to offset the rising risk of default and the increasing cost of financial operations.

The overall picture points to a transitional period: on one hand, credit supply remains available; on the other, the repayment capacity of a significant share of borrowers—especially heavily indebted households—continues to deteriorate.

Original story: ICL Notícias
Edititon and translation: Prime Yield

Spanish banks’ bad loans close in on €30bn threshold as NPL ratio hits post-crisis low

25 May, 2026

The stock of non-performing loans (NPLs) held by Spanish banks fell to €30.1 billion in March, bringing it close to dropping below the €30 billion mark for the first time since 2008, while the sector’s bad-loan ratio declined to 2.54%, its lowest level since the global financial crisis, according to data from the Bank of Spain.

The volume of NPL in the banking sector decreased by €563 million during the month to €30.082 billion, extending the 12-month reduction to €5.47 billion. The NPL ratio for banks, savings banks and credit cooperatives fell by seven basis points from February and by 58 basis points year-on-year, reaching its lowest level since August 2008.

Consumer finance institutions also recorded an improvement in asset quality, with their delinquency ratio edging down to 5.05% from 5.10% in February and falling 74 basis points compared with a year earlier. Their stock of doubtful loans stood at €2.222 billion at the end of March, €73 million higher than in February but €332 million lower than a year ago.

Across the entire credit sector, including deposit-taking institutions and specialised lenders, total doubtful loans amounted to €32.471 billion in March, down €492 million from the previous month and €5.809 billion from March 2025. The overall NPL ratio declined to 2.62%, seven basis points lower than in February and 59 basis points below its level a year earlier, marking another post-crisis low.

Meanwhile, lending activity continued to expand. Outstanding bank credit rose to €1.237 trillion in March, increasing by €10.5 billion month-on-month and by €46.2 billion compared with the same period last year.

Loan-loss provisions across all credit institutions totalled €26.855 billion at the end of March, down €151 million from February and €1.73 billion lower than a year earlier, according to the Bank of Spain.

Source: Europa Press
Edition and translation: Prime Yield

Five months on, the NPL market is starting to pick up

22 May, 2026

Five months after the new rules for credit managers came into force, the non-performing loan (NPL) market is finally showing signs of life, with the first portfolio of the year being ‘officially put on the market’ by 321 Crédito.

Since the new rules for credit managers came into force in December 2025, only five entities have so far obtained authorisation from the Bank of Portugal to operate. This is why the NPL market has virtually ground to a halt during this period and why the first portfolios of the year are only now beginning to be launched.

“Everyone is sorting out the paperwork so that [non-performing loan] processes can resume,” a market source told ECO. This information was corroborated to the newspaper by another source: “nothing new, just the issue of servicers being approved by the Bank of Portugal”.

Finsolutia, one of the major market operators with over €10 billion under management, was the most recent NPL manager to be authorised by the regulator. Previously, four other entities had already received the “green light” to carry out credit management activities in Portugal: Servedebt, Duo Capital, Soligest and the German firm Global Loan Agency Services.

It should be noted that the new regime for the assignment and management of bank loans came into force on 10 December, following the transposition of a European directive, bringing clearer rules for the sector and greater protection for debtors. In addition to mandatory registration, which subjects credit managers to strict criteria regarding suitability, experience and financial capacity, the new rules have banned practices involving harassment or coercion of customers.

Although the market has virtually stagnated, the regime came into force at a relatively quiet time for the banking sector, which is seeing NPL at historic lows, and also for bank customers, given economic growth and a robust labour market.

Only now is the market beginning to receive the first deals of the year: 321 Crédito has just launched ‘Project Boavista 3’, an unsecured loan portfolio worth €28 million, with the deal being organised by Alantra. A market source indicated that the transaction is scheduled to close in September, so no difficulties are anticipated regarding the registration of servicers. More portfolios from major banks are expected in the coming months.

The national system’s NPL ratio fell from a peak of 17.5% in 2015 to just over 2% at the end of last year, according to the latest data from the banking supervisor.

Source: ECO | Author: Alberto Teixeira
Edition and translation: Prime Yield
Image: by wsdamiao from Pixabay

€230 million portfolio of re-performing loans heads for secondary market sale

15 May, 2026

A total of 3,400 mortgage loans belonging to 1,800 borrowers is set to return to the banking system, as the debts have been successfully serviced again. The loans, worth €230 million, had previously been classified as non-performing but were subsequently restructured and have since returned to performing status.

The portfolio was acquired by doValue as part of the securitisation of bad loans under the Cairo 2 transaction, which Eurobank carried out in 2020. According to the terms complied with by the borrowers, the loans are now considered remedied and, based on the European Banking Authority’s rules, may no longer be classified as non-performing. This effectively means they have returned to full banking normality.

doValue Greece will complete the sale process and will continue to act as portfolio manager after the transaction closes, ensuring continuity in the management and monitoring of the loans on behalf of the new investors.

The sale on the secondary market to another fund marks the first step in a process whereby, under European Banking Authority rules, banks that sold these loans through securitisations are not permitted to repurchase them directly from the funds to which they were sold.

Source: Ekathimerini | Author: Evgenia Tzortzi
Edition: Prime Yield

NPL&REO News

Month: May 2026

Bank Default hits record high in Brazil

Spanish banks’ bad loans close in on €30bn threshold as NPL ratio hits post-crisis low

Five months on, the NPL market is starting to pick up

€230 million portfolio of re-performing loans heads for secondary market sale