Banks in the European Union face deteriorating prospects of recovering loans made to companies most affected by the coronavirus pandemic but have seen their overall levels of non-performing loans reduce, according to the latest data from the EUROPEAN BANKING AUTHORITY. The proportion of non-performing loans on banks' books fell by 20bp to 2.6% during the three months to the end of December. But the NPL ratio increased in accommodation and food services, and in arts, entertainment and recreation. All those areas have been more directly affected by the restrictions imposed by authorities to contain the spread of coronavirus. The NPL ratio for accommodation and food services rose 60bp to 8.4% and for arts, entertainment and recreation it went up 50bp quarter-on-quarterto7.2%.
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