Notwithstanding some recent progress in non-performing loan (NPL) disposals, the large stock of NPLs remains a key structural concern in several countries. In addition, overcapacity and cost inefficiencies continue to weigh on bank profitability in certain banking markets.
16 / 20  BIS central bankers' speeches  The economic recovery, the expected steepening of the yield curve and even the progress being made in reducing the NPL level from the average peak of 8% in 2013 to the more recent average of 5.5%, have improved the market assessment of future banks’ profitability.