One trillion euros of nonperforming loans in European banks
The European Banking Authority has said that banks in the region have one trillion euros of "nonperforming loans", or loans that are 90 days or more overdue and are unlikely to be repaid; a figure that amounts to 5.6% of all loans held by European lenders. In comparison, just 3% of US loans are considered nonperforming. Piers Haben, director of oversight for the EBA told lenders they will need to "continue addressing the level of nonperforming loans, which remain a drag on profitability”, however some headway has been made, with the percentage of nonperforming loans falling 0.5% since this time last year. 

LONDON — Bad loans continue to weigh on the bottom lines of European banks despite efforts by the region’s lenders to raise more capital and improve their risk profiles since the financial crisis, according to regulators.

The European Banking Authority, the banking regulator of the European Union, said on Tuesday that the region’s banks had one trillion euros, or about $1.06 trillion, in so-called nonperforming loans.

Nonperforming loans – those that are at least 90 days overdue or have been previously identified as unlikely to be repaid – accounted for 5.6 percent of total loans held by European lenders at the end of June, the regulator said in a new report on Tuesday. That was down from 6.1 percent at end of December.

By comparison, banks in the United States on average have about 3 percent of their total loans that are considered impaired, according to the European Banking Authority.