Five Charts That Explain How European Banks Are Dealing With Their Bad-Loan Problem

For European banks, it’s a headache that just won’t go away: the 944 billion euros ($1.17 trillion) of non-performing loans that’s weighing down their balance sheets.

The River Main flows past commercial and residential property as skyscrapers stand in the financial district as the city skyline is seen from the 15th floor pantry area inside the European Central Bank (ECB) headquarters in Frankfurt, Germany, on Wednesday, Oct. 18, 2017. In a tweet with the hashtag #Brexit, Goldman Sachs Group Inc. Chief Executive Officer Lloyd Blankfein on Thursday hailed “great meetings” he had in Frankfurt and said he will spend a lot more time there.Photographer: Alex Kraus/Bloomberg

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By Nicholas Comfort, Giovanni Salzano, and Sonia Sirletti

February 14, 2018 at 4:00 AM UTC

Updated on

February 14, 2018 at 4:13 PM UTC

This article is for subscribers only.

For European banks, it’s a headache that just won’t go away: the 944 billion euros ($1.17 trillion) of non-performing loans that’s weighing down their balance sheets.

Economists say the pile of past-due and delinquent debt makes it harder for banks to lend more money, hurting their earnings. European authorities are prodding lenders to sell or wind down non-performing credit, but they’re split on how to tackle the issue, and some investors are disappointed by the pace of progress.