Loans to small and medium-sized enterprises remain one of the most important segments within the European NPL market. SMEs represent a significant share of bank lending across many European economies, making them particularly sensitive to economic cycles.
While the overall credit quality of European SME lending remains stable, certain sectors are experiencing pressure due to higher financing costs and uneven economic growth.
Banks continue to monitor SME portfolios closely and may selectively dispose of distressed exposures as part of ongoing portfolio management.
Market implication
SME-related exposures are likely to remain a recurring source of NPL transactions across European markets.