The Total Non-Performing Loans (NPL) net of provisions to capital in Canada was 4.7% in 2023. Forecasts indicate a gradual decline from 4.5% in 2024 to 4.19% in 2028. This downward trend suggests an improvement in the quality of loan portfolios relative to the capital available, signaling a potentially stronger financial position for Canadian banks. The year-on-year changes show a consistent decrease with a Compound Annual Growth Rate (CAGR) of approximately -1.36% from 2024 to 2028.
Future trends to watch for include the impact of economic conditions on loan performance, regulatory changes affecting capital adequacy, and shifts in lending practices that could influence NPL ratios.
