The combined weight of NPL accounts for 24% of those granted to the sectors most affected by the pandemic.

The Bank of Spain’s Financial Stability Report confirms that loans under special surveillance have grown by 14% at the end of 2021 compared to 2020. “The ratio of loans under special surveillance continued to increase, particularly in the sectors most affected by the pandemic, where the nonperforming (NPL) loans ratio also increased slightly,” explains the regulator’s spring report.

A credit is classified as NPL when it accumulates defaults of more than three months or for an amount exceeding 25% of the debt. Its predecessor is credit under special surveillance: these are those in which, even though no default event has occurred, a significant increase in credit risk has been observed since the time of granting. According to the Financial Stability Report, the combined weight of NPL and loans under special surveillance accounts for 24% of the credit granted to the sectors most affected by the pandemic, 18% in the moderately affected sectors and 15% in the remaining sectors. 

Original Story: Diário Siglo XXI | Press
Photo: Photo by Victor Iglesias in FreeImages
Edition: Prime Yield