Malta banks report decline in loan default ratios

Banks in Malta have reported a decrease in the number of borrowers defaulting on loans. According to recent supervisory banking statistics for June 2026 published by the Malta Financial Services Authority, both the non-performing loans (NPL) and non-performing exposures (NPE) ratios have been on a downward trend since the fourth quarter of 2024.

The NPL ratio fell from 2.79 percent to 1.96 percent during the period, while the NPE ratio dropped from 1.54 percent to 1.2 percent. Major institutions, including Bank of Valletta and HSBC, attributed this improvement to a resilient domestic economy, steady employment levels, and the healthy financial positions of many households and businesses.

Bank of Valletta noted that the bank has maintained robust underwriting standards and proactive credit risk management to address emerging risks and reduce legacy non-performing exposures through recoveries and restructurings.