The 2026 NPL market report is out, with a few headline figures worth looking at. The aggregate numbers can be somewhat misleading, though - the picture changes quite a bit once you look at underlying data.
All figures are as of Q4 2025.
NPL volumes at large banks under direct ECB supervision fell only marginally - down €1.81bn to €355.16bn between end-2024 and end-2025, with the overall NPL ratio easing from 1.93% to 1.89%. Read on its own, that looks like calm water.
Break it down by country and the calm disappears. Volume changes (ECB, banks under direct supervision):
* Spain and Italy keep shrinking their NPL books (-€5.70bn and -€4.75bn)
* France and Germany are moving the other way (+€7.58bn and +€4.56bn)
Commercial real estate NPL ratios (EBA Risk Dashboard, different bank sample):
* Germany rose from 5.9% to &.9% - the highest of the five markets we looked at (FR, ES, IT, DE, NL) - while its overall NPL ratio is only 1.54%, the second-lowest of the five
* France rose from 3.4% to 3.7% - Spain, Italy and the Netherlands all fell
What's more interesting than the volumes themselves is how the adjustment is happening. Much of the pressure so far has been absorbed through extensions and restructuring rather than outright sales or enforcement - banks and borrowers buying time rather than resolving the underlying gap between valuations, funding costs and business plans. But refinancing deadlines are stacking up: according to the BKS 2026 Annual Publication (Oliver Platt), German CRE refinancing needs alone are estimated at €74-86bn for 2026-2028.
Genuinely curious what this sub is seeing on the ground:
Is Germany looking at a delayed NPL cycle or is this structural - less workout/servicing infrastructure than Spain and Italy built after their own crisis-era clean-up?