This section presents information about the loans whose repayment is uncertain and the regulatory attempts to remove these loans from banks' balance sheets.
A loan is assessed to be non-performing if it is in arrears for more than 90 days or if there is uncertainty about its collection independently of any repayment delay. Banks are required to report their non-performing loans to the regulatory authorities.
The graph shows the evolution of non-performing loans in the banking system, separately by type of loan (consumer, residential, business).
The next graph shows the share of loans of each type that are non-performing.
Since 2018, a large part of banks' non-performing loans has been transferred to Credit Servicing Firms (CSFs or "Servicers") which are financial institutions that specialize in managing such loans. These loans have, therefore, been removed from the banks' balance sheets, though they remain within the domestic financial system.
The graph shows the evolution of loans managed by Servicers separately by type of creditor and, for households, by type of loan.
Banks are required to set aside part of their capital to cover potential losses from non-performing (bad) loans. The graph shows the evolution of the banking system's total provisions for bad loans and their relation with the banking system's capital.