NPL Monitor for the CESEE region H1 2019 - Useful Links
According to the latest publication, NPL volumes stood at their lowest in eight years (€37.9 Bn as of 30 September 2018 for the region), and the NPL ratio reached 4.4% (a decrease of 1 pp yoy). Further sales of NPLs from banks to investors have continued to drive the decrease, with loan sales activity amounting to €3.11 Bn in 2018.
This year marks the 10th anniversary of the Vienna Initiative and the 6th anniversary of the NPL Initiative. Since the launch of the NPL Initiative in 2014, important regulatory, supervisory and tax reforms have been implemented to improve the resolution of NPLs, and the conditions for a sound secondary NPL market (although still not perfect) contributed greatly to the ability of banks to deleverage a large part of the stocks. This resulted in a gross NPL ratio in the region, more than halving since its peak of 9.8% in Q1 2014 to 4.4% in Q3 2018. However, work is still not complete. Progress in recent years has in large part been driven by the need to tackle the NPL stock, but more must be done to embed changes within the banks themselves for sustainable long-term NPL prevention and management.