Where Bank Loans Go Bad — Nonperforming Loan Rankings 2026
This week’s global ChatGPT outage was a reminder that financial systems face more than traditional credit risk — operational and technological disruptions can cascade through interconnected markets. But the most fundamental risk banks carry remains the oldest one: loans that stop being repaid. The World Bank tracks nonperforming loans (NPLs) as a percentage of total gross loans across 144 economies, and the gap between the best and worst performers is enormous.
South Korea has the world’s cleanest loan books at just 0.2% NPLs (2022) — fewer than 1 in 500 loans is delinquent. At the other extreme, Ukraine carries a 37.4% NPL ratio (2023) — more than a third of all bank loans are not being repaid. For an explanation of what this metric measures and its limitations, see our guide to what nonperforming loans mean.
What NPL ratios measure
The nonperforming loan ratio is the share of a bank’s gross loan portfolio that is overdue (typically 90+ days past due) or unlikely to be repaid in full. A low ratio suggests a healthy credit environment and effective risk management. A high ratio signals systemic stress, weak underwriting, or economic distress.
This metric is closely related to bank capital adequacy — banks need capital buffers to absorb losses when NPLs rise. See our ranking of where bank capital adequacy runs deepest for the companion picture, and our explainer on what bank capital adequacy ratios mean.
The cleanest loan books
| Rank | Economy | Nonperforming Loans (% of total) | Year |
|---|---|---|---|
| 1 | South Korea | 0.2% | 2022 |
| 2 | Micronesia | 0.3% | 2021 |
| 3 | Norway | 0.4% | 2023 |
| 4 | Sweden | 0.4% | 2023 |
| 5 | Lithuania | 0.4% | 2022 |
| 6 | Canada | 0.5% | 2023 |
| 7 | Australia | 0.7% | 2022 |
| 8 | Switzerland | 0.8% | 2023 |
| 9 | United States | 0.8% | 2023 |
| 10 | Dominican Republic | 0.9% | 2023 |
The cleanest loan books belong overwhelmingly to high-income economies with sophisticated credit infrastructure, strong legal frameworks for recovery, and diversified economies. South Korea’s 0.2% is remarkable — it means fewer than 2 loans per 1,000 are delinquent, reflecting tight underwriting standards and a recovery-friendly legal environment. The United States at 0.8% and Canada at 0.5% similarly show North American banking systems operating with very low credit stress.
For context on how this compares with borrowing penetration, see our analysis of where bank borrowing runs deepest.
The highest NPL burdens
| Rank | Economy | Nonperforming Loans (% of total) | Year |
|---|---|---|---|
| 135 | Angola | 15.0% | 2021 |
| 136 | Republic of the Congo | 15.2% | 2023 |
| 137 | Central African Republic | 16.2% | 2023 |
| 138 | Saint Kitts and Nevis | 19.4% | 2023 |
| 139 | Algeria | 20.3% | 2022 |
| 140 | Ghana | 20.6% | 2023 |
| 141 | San Marino | 21.0% | 2023 |
| 142 | Equatorial Guinea | 31.1% | 2023 |
| 143 | Chad | 31.5% | 2023 |
| 144 | Ukraine | 37.4% | 2023 |
The highest NPL ratios cluster in conflict-affected and fragile states. Ukraine’s 37.4% reflects the direct impact of the ongoing war — businesses destroyed, collateral lost, and entire regions cut off from banking services. Equatorial Guinea (31.1%) and Chad (31.5%) reflect concentrated economies vulnerable to commodity price shocks. Ghana (20.6%) shows how sovereign debt distress spills into the banking system — when the government restructures its debt, banks holding government paper take losses that manifest as rising NPLs.
Regional patterns
Europe shows the widest NPL divergence on the planet. Norway and Sweden sit at 0.4%, Germany at 1.5%, and France at 2.1% — all comfortably below 3%. But Greece at 6.0% still carries legacy NPLs from the sovereign debt crisis, and Ukraine at 37.4% is the highest in the world.
Asia has some of the lowest NPL ratios globally. South Korea leads at 0.2%, Japan is at 1.2%, and China at 1.7%. India has improved dramatically from double-digit levels a decade ago, now at 1.7%.
The Americas show moderate NPLs overall. The United States at 0.8% and Canada at 0.5% are among the world’s cleanest. Brazil at 2.8% is manageable but higher than most large emerging economies.
Africa carries the heaviest NPL burden of any region, driven by a combination of weak legal frameworks for recovery, concentrated commodity-dependent economies, and limited credit information systems.
For a broader picture of banking system health, see our analysis of where banks keep their capital deepest and our explainer on what liquidity reserves measure.
What 2026 looks like
NPL data lags by 1-2 years. The most recent available year varies by economy (from 2021 to 2024). As of 2026, global NPLs have been trending downward in most regions since the post-COVID spike, but rising interest rates in 2024-2025 are putting pressure on borrowers. Higher-for-longer rates typically raise NPL ratios with a 12-18 month lag, meaning the current low levels in advanced economies may not persist. High-frequency indicators suggest NPLs are beginning to edge up in commercial real estate lending in particular.
For the latest on bank lending conditions, see our report on how firms fund working capital and the global interest rate spread ranking.
Sources & method
Nonperforming loan data comes from the World Bank’s World Development Indicators (indicator FB.AST.NPER.ZS — Bank nonperforming loans to total gross loans), covering 144 economies. NPLs are defined as loans overdue by 90+ days or unlikely to be repaid. The data year varies by country (most recent available, from 2021 to 2024). See the methodology page for full details on how FinStatGlobe processes and presents banking data.