Portuguese NPL stock declines by €11.1 billion in 2018

After reaching € 37 billion in 2017, Portugal’s Non Performing Loan (NPL) stock pile shrank by € 11.1 billion along 2018, standing at € 25.9 billion in December last. The corporate NPL had a significant impact for this decrease, in which the NPL stock reduction was due not only to the rebate from the asset but also to the NPL recoveries and sales.

These achievements were highlighted by Portugal’s Central Bank in its Executive Board Annual Report. The document stresses that the NPL, considered to be one of the main vulnerabilities of the Portuguese banking system, has significantly reduced over the last year.

More specifically, the NPL went down from its €50.5 billion historic peak of June 2016 to €25.9 billion in December 2018, in a sharp drop of almost 50%, lowering in €24.7 billion.

This sustained downward trend within the NPL stock allowed that by the end of 2018 the NPL ratio stood below the 10% (9.4%), comparing with the 13.3% recorded just a year before.

Original Story:Jornal Económico | Maria Teixeira Alves 
Photo: Banco de Portugal
Edition & Translation:Prime Yield