Progress and Challenges in Reducing Non-Performing Loans
January 12, 2026
European banks are working to reduce non-performing loans with varying degrees of success. Cyprus has made significant progress, with the non-performing loans rate dropping to 0.9% in Q3 2025. Currently, the overall rate in the EU remains stable at 1.84%, but there are rising non-performing loans among businesses, particularly in Austria, France, and Germany. Household loan indicators are generally stable, although Denmark saw a significant improvement. Analysts expect a moderate decline in asset quality in the near future.