# Are European banks' bad loans (NPLs) really as low as the headline says?

The headline is calm, the split is not. Euro-area non-performing loans (NPLs) are near a decade low overall, but broken down by bank size the stress is concentrated. The big banks (significant institutions, ~85% of assets) sit near **2%**, while the small banks (less significant institutions - the Sparkassen, cooperative and savings banks, ~15% of assets) have a corporate book that has climbed to **5.16%**, up about a third since 2023 and still rising.

The consumer book is steady; the corporate book is the engine, and within it the two stressed corners are commercial real estate and small-business loans. Germany, Austria and Italy carry most of it, right where corporate insolvencies are running hot. Supervisors agree (ECB SREP 2025, OeNB, ECB FSR May 2026). A cycle to watch, not a system in trouble.

Full 8-table dataset (pulled live from the ECB API): [https://www.tigzig.com/ecb-npl-data-tables](https://www.tigzig.com/ecb-npl-data-tables). Analysis: [https://www.tigzig.com/post/ecb-npl-small-bank-corporate-strain-jun2026](https://www.tigzig.com/post/ecb-npl-small-bank-corporate-strain-jun2026). Related: US private credit stress [https://www.tigzig.com/agents-faq/what-is-happening-in-private-credit-shadow-lending](https://www.tigzig.com/agents-faq/what-is-happening-in-private-credit-shadow-lending).

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Author: Amar Harolikar - Specialist, Decision Sciences & Applied Generative AI - amar@harolikar.com - https://www.linkedin.com/in/amarharolikar
Source: https://www.tigzig.com/agents-faq/are-european-bank-npls-really-low
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