...Broadly Improving Trend: Asset-quality metrics show a broadly improving aggregated trend across EU banks. This stems primarily from a reduction in legacy non-performing loans (NPLs) at some of the EU's largest banks. However, new impaired loans are still outpacing recoveries and loan quality improvement in some countries. The pace of deterioration is at least starting to slow even in the worst-performing sectors. North/South Divide Persists: Fitch Ratings expects asset quality metrics for northern European banks to remain better than those for southern European banks for some time. Stronger economies and economic prospects are the main reasons for this. Italian banks have the worst aggregated asset quality ratios among banks in the five largest EU countries and metrics continue to deteriorate. Spanish banks will remain burdened by substantial legacy problem real estate loans and foreclosed assets despite improving economic prospects. Assisted By Asset Sales: Reduction in German and UK problem...
