Non-performing loan (NPL)

Generally, a loan for which repayment in full is doubtful and for which a specific valuation allowance is required on the part of the bank. In Germany, the share of non-performing (bad) loans in the total credit volume was estimated at seven percent in 2005. – A loan that has not been repaid in full after maturity (the maturity date has passed and payment in full has not been made). – According to the definition of the Financial Soundness Indicators, a non-performing loan with a payment delay of ninety days (principal or interest is ninety days or more delinquent). – Non-performing loans can be sold by banks; hedge funds now take the leading role in the non-performing loan market, accounting for about four-fifths of the total. – See default, balance sheet cleanup, default, collection, claim, contaminated, claim, dubious, loan, nonperforming, loan defaults, credit event, lending principle, customer, bad, air securities, nonperforming loans, papers, toxic, reintermediation, risk department, subprime crisis, loss recovery, tax, allowance, lemon trade. – Cf. BaFin Annual Report 2006, pp. 131 f. (overview of NPLs since 1998), BaFin Annual Report 2007, pp. 137 f. (legal situation regarding the sale of NPLs), BaFin Annual Report 2008, p. 134 (volume of NPLs declined; chart) and the respective BaFin Annual Report, Deutsche Bundesbank Monthly Report of July 2008, p. 25 (share of hedge funds in trading in nonperforming loans), Financial Stability Report 2009, p. 45 (NPLs of German banks since 2000, broken down by institution group), Financial Stability Report 2012, p. 28 et seq. (nonperforming loans in the euro area since 2007; overview by member country; claims of German institutions on member countries), BaFin Annual Report 2013, p. 98 (volume of non-performing loans).

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University Professor Dr. Gerhard Merk, Dipl.rer.pol., Dipl.rer.oec.
Professor Dr. Eckehard Krah, Dipl.rer.pol.
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