The Austrian National Bank (OeNB) has published its 52nd Financial Stability Report, highlighting a growing and ageing stock of nonperforming loans (NPLs) despite stabilising credit quality. Commercial real estate (CRE) remains a supervisory focus as unresolved problem loans increasingly weigh on banks’ capital. Nevertheless, strong capital levels and stress test results indicate that the banking sector overall could withstand a severe economic downturn.
The aggregate NPL ratio has stabilised just below 3%, but the absolute stock continues to rise and loans are being resolved comparatively slowly. At 56 of Austria’s 314 banks, NPL ratios exceed 5%. Domestic CRE lending has an NPL ratio above 8%. The existing sectoral systemic risk buffer for these exposures has stood at 2% since July 1, 2026, and is being phased up to 3.5% by mid-2027. The OeNB calls for active management and consistent reduction of NPLs, higher provisions, particularly for unsecured loan exposures, and conservative collateral valuations.
Banking sector profits reached EUR 9.3 billion in the first half of 2026, driven largely by exceptional items, particularly write-ups of equity investments, and a bank acquisition in Poland. Profits from operations in Central, Eastern and Southeastern Europe contributed EUR 3.3 billion. Retained earnings from recent years have supported capital levels. The OeNB stresses the need to balance profit retention for capital building against acquisitions and dividend distributions, alongside investment in cybersecurity and digitalisation under overall cost discipline.