The European Commission confirmed that efforts to reduce risks in the banking sector are bearing fruit, in its fourth progress report on the reduction of non-performing loans. The ratio of non-performing loans in EU banks has come down by more than half since 2014, declining to 3.3% in the third quarter of 2018 and down by 1.2 percentage points year-on-year.
The further decline in non-performing loans is a key area for reducing risk in the European banking sector. Since the financial crisis led to a more widespread inability of borrowers to pay back their loans, the Commission has been working together with national authorities concerned to address the high level of non-performing loans. National banks have themselves also made considerable progress in cleaning up bank balance sheets since the crisis.