Austrian FMA: Speedy Reduction of Non-Performing Loans

Austrian FMA News

Published March 11th, 2026

Detected March 16th, 2026

Summary

The Austrian Financial Market Authority (FMA) has released a new publication in its 'Let's talk about supervision' series, focusing on the speedy reduction of non-performing loans (NPLs). This guidance highlights the importance of NPL reduction for banking sector resilience and economic functioning, particularly in commercial real estate financing.

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What changed

The Austrian Financial Market Authority (FMA) has issued "Let's talk about supervision No. 13 – Speedy reduction of NPLs," a new guidance document emphasizing the supervisory and economic benefits of rapidly reducing non-performing loans (NPLs). The publication specifically addresses the area of commercial real estate (CRE) financing, noting that a swift and substantial decrease in problematic lending is crucial for the banking sector's resilience, capital planning, and lending capacity.

This document is part of a new information series aimed at supervised entities to clarify new supervisory areas and market-detected needs for explanation. While non-binding, it signals the FMA's focus on NPL management and encourages banks to proactively address problematic exposures. Regulated entities, particularly those with CRE exposure, should review the FMA's recommendations to ensure their NPL reduction strategies align with supervisory expectations and contribute to overall financial stability. No specific compliance deadline or penalties are mentioned, but adherence to supervisory standards is implied.

What to do next

Review FMA guidance on NPL reduction strategies.
Assess current NPL levels, particularly in CRE portfolios.
Ensure NPL reduction plans align with supervisory expectations.

Source document (simplified)

Let’s talk about supervision No. 13 – Speedy reduction of NPLs

March 2026

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- Publication
Non-performing exposures influence the resilience of the banking sector, the quality of capital planning and the lending channel’s ability to function. Currently the area of commercial real estate (CRE) financing is demonstrating that the short-term and substantial reduction of problematic lending is not only essentially necessary from a supervisory perspective, but is also desirable from an economic operating perspective.

Reden wir über Aufsicht - Zügiger NPL-Abbau (pdf, 223,2 KB, German)

A new information series for supervised entities

Let’s talk about supervision – is the Austrian Financial Market Authority’s new regular information series for supervised entities. This format is intended for covering new areas of supervision as well as thematic areas where a need for explanation has been detected in the market. Relevant thematically-specific information is intended to be communicated in a quick and easy to understand manner, to create greater clarity as well as contributing towards ensuring that supervisory standards are observed. All editions published to date can be found here (in German only).

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