Npl Meeting 2025: €22 billion annual Npe volumes expected in Italy

Il European Npe picture: in the second quarter of 2025, the gross stock of Npe of European significant banks stood at EUR 373 billion, compared to EUR 376 billion in the previous quarter. The decline was substantially due to the decrease in the stock in Italy and Spain while impaired loans continued to grow in Germany and France. In particular, in Germany and France the increase in NPEs was mainly due to the corporate segment, with the real estate sector contributing 89% in Germany. Also in France, the corporate segment is predominant at 63%, but the impact of households is also significant at 37%. However, the Npe ratio of EU significant banks remained stable at 1.84% in '2Q 2025.

L trend of impaired credit in Italy: in Italy, the rate of credit deterioration remains low: in the worst scenario forecast by the ECB in the event of a tightening of US tariffs, it would stand at 1.25% in 2027, i.e. only 10 basis points higher than the baseline scenario but still at historically low levels. Contributing most to the credit deterioration is the worsening forecast in the corporate sector. Among these, construction has the highest deterioration rate (3.0%), followed by accommodation and food services (2.6%) and trade (2.4%). Positive news, however, on the household front, whose deterioration rate remained stable at around 0.6%, in line with the levels of the last five years. In general, the downward trend in the stock of impaired loans in Italy (banks+investors) is confirmed, with a reduction of EUR -86 billion over the 2015-2025 decade.

L incidence of public guarantees: in Italy, there are approximately EUR 155 billion of loans backed by public guarantees outstanding for companies, of which as much as EUR 61 billion are linked to MCCs. These are almost exclusively residual guarantees issued in the Covid era, which peaked at EUR 174 billion in 2021. On the household front, however, the scenario is better. The total stock of public guarantees for the purchase of first homes stood at EUR 29 billion at the end of 2024, while the financing of guarantees linked to the pandemic period has been fully repaid.

The NPL transaction market in Italy: an analysis by Banca Ifis' Research Department estimates that in the three-year period 2025-2027, NPE volumes of around EUR 22 billion per year will be transacted in Italy, in line with 2024 levels. Of these, about 50% of volumes will be transacted on the secondary market, confirming the liveliness of exchanges of less fresh flows. Moreover, over the period 2025-27, it is estimated that disposals on the primary market will account for 81% of new impaired flows, confirming the virtuous collaboration between originators and operators in the NPL sector, which is key to continuing to reduce the country's Npe ratio.

Il consolidation of the Italian NPL industry: the level of maturity reached by the Italian NPL industry has generated an acceleration in the consolidation path between operators. Since 2018, the servicing market has recorded 59 M& A and joint venture transactions aimed at optimising structures and recovery processes. This efficiency is also reflected in the numbers, as evidenced by the fact that assets under management per capita in the period rose by 39% despite 4 fewer operators active in the market.

L incidence of judicial recovery: the Banca Ifis study also analysed collections on 44 Scope-rated portfolios from 2017 to date. This analysis shows a decrease in the recovery rate correlated with an increase in the incidence of judicial recovery, which becomes more significant from 2023 onwards. Weighing most heavily on the slowdowns are delays in the Italian judicial system due to workloads, judicial holidays or strikes, as well as the many court digitisation projects that have not yet been completed. As a result, the securitisations analysed record more complex processing for those positions that require longer lead times.

L Artificial Intelligence as a lever to accelerate development: the ability to reduce costs and make processes more efficient is crucial in the development of European NPL operators, who are therefore looking to AI as a strategic development lever. According to Banca Ifis' analysis, to date about fifty AI implementation projects have been announced by European NPL operators. Among the areas of application, predictive analytics, the search for early signs of risk, the automation of complex processes and the streamlining of document management stand out in particular.

"European credit trends show an upturn in the stock of impaired exposures from significant banks. This phenomenon is polarised and concentrated mainly in France and Germany, where there are growing impaired exposures in the corporate and real estate sectors, generated by the current economic situation. Italy, on the other hand, maintains a historically low level of risk, even in the current highly volatile environment, thanks to the effectiveness with which operators in the sector work with the banking system. The Italian NPL industry has reached a maturity to be a strategic ally of banks, effectively accommodating new stocks of impaired loans. This path, with Banca Ifis at the forefront, can only continue to be effective in the future if the Italian NPL industry remains up-to-date in terms of development and innovation: in this sense, the implementation of new technologies will be a key component in making operating models more efficient, but also more sustainable. An issue, that of sustainability, which is central to Banca Ifis and on which we have built a project called Social Banking, which has allowed us to review processes from a social perspective in order to encourage the financial re-inclusion of our customer-debtors,' said Frederik Geertman, CEO of Banca Ifis.