Notes on Financial Stability and Supervision no. 48 - Bad loan recovery rates in 2024

18 December 2025

This note:

  • updates to 2024 the estimated bad loan recovery rates already published in previous issues of the Notes on Financial Stability and Supervision starting from 2017;
  • illustrates the results of the yearly survey on NPL sales, conducted by Banca d'Italia starting from 2016.

The analysis reached the following main conclusions.

Closing of bad loans and unlikely-to-pay loans

  • In 2024, bad loan positions amounting to around €6 billion were closed (i.e. derecognized from banks' financial statements). This amount, which is around 1.4 times higher than that of newly-classified bad loans, is lower than the amount recorded in 2023 both in absolute terms (€9 billion) and as a percentage of bad loans outstanding at the end of the previous year (37 per cent, against 44 per cent).
  • The decrease compared with 2023 is mainly attributable to reduced sales on the market (from €5 billion to €3 billion) and explained by the progressively lower stock of bad loans, which reduced the need for massive disposals.
  • Strategies for managing non-performing loans are currently based on a more balanced contribution from the available management levers: the amount of bad loan positions that were closed using standard recovery procedures in 2024 was comparable to the amount of sales on the market (€3 billion each).
  • The most recent data on the time to close bad loan positions confirm the progress achieved in recent years, benefiting from both the reduction in the stock of bad loans and the banks' improved management of these loans: the share of positions closed within three years of their classification as bad loans is 87 per cent (88 per cent in 2023).
  • The amount of unlikely-to-pay loans sold on the market was stable, at around €4 billion.

Recovery rates of bad loans closed

  • Compared with 2023, the average recovery rate increased by 5 percentage points, reaching 41 per cent, partly (i.e. by 3 percentage points out of 5) due to the closing of bad loan positions backed by public guarantees and characterized by particularly high recovery rates. The increase was observed both for positions closed using standard recovery procedures (from 30 to 36 per cent) and for positions sold on the market (from 45 to 47 per cent), whose incidence on the total amounts of bad loan closures decreased from 60 to 50 per cent.
  • The average recovery rate for bad loans secured by collateral increased by 3 percentage points, to 44 per cent, sustained by the increase observed on bad loans sold to third parties (from 35 to 41 per cent).
  • For unsecured positions, the recovery rate increased by around 9 percentage points (from 28 to 37 per cent), mostly (i.e. 6 percentage points) attributable to the closing of bad loan positions backed by public guarantees.

Sale prices of non-performing loans

  • The price of bad loans sold in 2024 was equal to 24 per cent of the gross book value at the time of sale, increasing by 2 percentage points compared with 2023. The price remained stable for bad loans secured by collateral (34 per cent), while it significantly increased for unsecured positions (from 13 to 18 per cent), benefiting of the higher price recorded on positions with public guarantees.
  • The sale price of non-performing loans other than bad loans averaged 51 per cent, 4 percentage points higher than the value observed in 2023; the increase applied to both the secured and the unsecured component.