Jurisdiction(s):
United Kingdom

Non-performing loans (NPLs): EU and UK supervisory, insolvency and secondary market developments timeline (2016–2023)

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A bank loan is treated as a non-performing loan (NPL) if more than 90 days pass without the borrower making the agreed instalments or interest payments. Banks experienced an accumulation of NPLs in their books when borrowers' inability to repay was intensified by the financial crisis and subsequent recessions. When NPLs are proportionately high, banks' capacity to manage the riskiness of their lending is diminished. NPLs are a supervisory priority for the European Central Bank (ECB), which monitors the overall level of NPLs across euro area banks. Under the supervisory review and evaluation process (SREP), the ECB assesses whether individual banks adequately manage loan risk and whether they have suitable strategies, governance arrangements and processes in place. The ECB also regularly undertakes co-ordinated exercises to review the asset quality of the banks it directly supervises—it works with national supervisors to establish a consistent and effective approach to tackling and reducing bad loans, drawing on best practices as set out in the ECB's 'Guidance to banks on non-performing loans'...

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Web page updated on 20/05/2026

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