This is the case of Portugal, for instance, where NPLs grew essentially in the context of the 2011–13 recession and are a manifestation of the ongoing economic adjustment process, characterized by a reallocation of resources towards the tradable sector and away from the construction and real estate sectors.
The current setting mirrors these differences in pace and drivers, as well as the specificities of national economies: some jurisdictions report double-digit NPL ratios, while others report much lower levels. In an integrated market, however, different ratios do not – cannot – mean different degrees of concern.