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