In 2020, the deleveraging of NPEs, which began in 2015, continued to reach its lowest levels since 2008. The government support measures allowed the freezing and slowing of the credit deterioration process. This is what emerges from the PwC “Reshuffling the Cards” report on Non-Performing Exposure (NPE) which highlights that the gross volumes of NPE on the books of banks have decreased by more than 70% compared to the 5-year peak ago and went from 341 billion euros in 2015 to 99 billion at the end of 2020. Furthermore, the ‘cumulative’ stock of NPE in the Italian market (also including the portion owned by investors) is worth over 350 billion and represents one of the main markets at European level.
From PwC they also underline that “there is still great uncertainty about the impact that the current crisis will have on the new flows of impaired credit since to date this phenomenon is not yet visible due to the special measures introduced”. However, it is clear that the pandemic will have a significant impact on the NPE stock: the market expects between 80-100 billion new NPE inflows in the next 24-30 months. And in detail, the new NPE flows will mainly consist of small / medium-sized enterprises belonging to the sectors most affected by the crisis. UtPs will be among the asset classes most affected by the pandemic and the most complex for banks to manage.
Finally, as regards the National Recovery and Resilience Plan (PNRR), this, the experts explain, will play a key role in the recovery of the real economy and will also affect the NPE market, directly affecting the probability of default of companies that have had access to extraordinary support measures.