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Non-performing loans are those that are in default or are close to being in default. Many standard contract terms specify that loans become non-performing after being in default for ** days, but this can vary. The share of Europe's largest banks’ non-performing loans ranged from *** percent for Credit Suisse Group to just under * percent for the Italian bank Intesa Sanpaolo.

Non-Performing loan coverage

The non-performing loan coverage ratio looks at a bank's ability to absorb future losses. Banks understand not every loan that they lend will be paid in full, so by predicting the rate of non-performing loans, banks can be prepared to cover these future losses. The higher the coverage ratio, the better prepared a countries banks are for such an outcome. Overall, European banks displayed relatively healthy NPL coverage ratios.

Key performance indicators

Return on capital (ROC) is used by financial companies such as banks not only as a measurement of profitability, but as an indication of the bank’s ability to create value on the amount invested by the shareholders. Of Europe's largest banks, it was the Russian bank Sberbank that had the highest return on capital at . Sberbank also displayed the highest return on assets (ROA) as compared to European banks in 2018. Return on assets (ROA) is a ratio used to measure how well a company is using its assets to generate income. The ratio is calculated by dividing the Net Income by the average total assets over a given period.