The stock of non-performing loans is also decreasing rapidly: net of write-downs, in June it had fallen to € billion, equal to 8.4 per cent of total loans, from the peak of € billion, or around 11 per cent of total loans, reached in 2015. The ratio of bad debts to total loans has declined from 4.8 to 3.9 per cent.
Over the next few months, disposals and securitizations already under way and those recently announced by a number of banks will further drive down the stock of NPLs, which, net of existing write-downs, should fall below 8 per cent of total loans in the early months of 2018.