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July 28, 2017 | Over €1 Trillion Nonperforming EU Loans: EU vs US Percentages

Mike 'Mish' Shedlock

Mike Shedlock / Mish is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction.

An EU report out this month shows nonperforming loans were a staggering €1.092 trillion as of the end of 2016.

The average non-performing rate in the EU is 5.1%, down from 5.7% in 2015. For comparison purposed, a World Bank Report has the US at 1.3%, Japan at 1.5%, and Canada at 0.6%

In contrast, Greece and Cyprus have NPL ratios of 46% and 45% respectively. Bulgaria, Croatia, Hungary, Ireland, Italy, Portugal, Slovenia, and Romania all have NPL ratios between 10% and 20%.

Non-Performing Loans

Notes

  • I am unsure why the graphs sometimes use different country codes than appears in the first column. Where different, I show both symbols. The list of country codes is shown below.
  • Forb ratio stands for forbearance ratio.
  • Cov ratio stands for coverage ratio: (Loans – Reserve balance)/Total amount of non-performing loans. It’s a measure of how prepared a bank is for losses.

Country Codes

Italy, Greece, Spain, Portugal, and Ireland have a combined €606 billion in non-performing loans.

Clearly, the EU banking system is quite troubled.

Mike “Mish” Shedloc

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July 28th, 2017

Posted In: Mish Talk

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