Provision coverage ratio by segment
Enter each segment’s gross loans, non-performing loans, provisions and net charge-offs. See coverage and the shortfall to your target by segment.
Shortfall by segment
Provisions cover 55.0% of non-performing loans against your 60.0% target. Counted segment by segment, the shortfall is €4,300,000, compared with €1,880,000 from the book’s totals alone. SME loans carries 48.8% of the shortfall.
Coverage by segment
Each bar shows a segment’s provisions as a share of its non-performing loans. Red marks coverage below the target, shown by the dashed line.
Segment results
| Segment | Coverage | Shortfall | Provisions held | Provisions needed | NPL ratio | Reserve ratio | Years covered |
|---|---|---|---|---|---|---|---|
| Cards | 84.7% | €0 | €8,300,000 | €5,880,000 | 5.00% | 4.23% | 0.82 |
| Personal loans | 51.5% | €860,000 | €5,200,000 | €6,060,000 | 4.01% | 2.06% | 0.88 |
| Car loans | 43.3% | €1,000,000 | €2,600,000 | €3,600,000 | 2.01% | 0.87% | 1.13 |
| BNPL | 45.8% | €340,000 | €1,100,000 | €1,440,000 | 3.93% | 1.80% | 0.37 |
| SME loans | 37.9% | €2,100,000 | €3,600,000 | €5,700,000 | 6.01% | 2.28% | 1.64 |
| Sum by segment | 55.0% | €4,300,000 | €20,800,000 | €22,680,000 | 3.92% | 2.16% | 0.89 |
| Book totals alone | 55.0% | €1,880,000 | €20,800,000 | €22,680,000 | 3.92% | 2.16% | 0.89 |
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The next step is to include each segment’s expected loss in the credit decision, so new lending in an under-covered segment is priced and limited before the gap grows. Start free
Show formulas
Coverage = Provisions held ÷ Non-performing loans NPL ratio = Non-performing loans ÷ Gross loans Reserve ratio = Provisions held ÷ Gross loans Years covered = Provisions held ÷ Net charge-offs Provisions needed = Target coverage × Non-performing loans Shortfall = Provisions needed − Provisions held, Minimum zero
The target is your own figure, not a regulatory or accounting requirement. The calculation excludes collateral and staging, and makes no forward-looking adjustment.
Provision coverage ratio by segment
The provision coverage ratio shows provisions held as a share of non-performing loans. Enter each segment’s non-performing loans and provisions to calculate its coverage.
A book’s average can obscure segments that fall short of the target. Compare coverage by segment and see the shortfall counted across the segments.
Common questions
How do I calculate the provision coverage ratio?
Divide provisions by non-performing loans to calculate coverage. This calculator shows the result for each segment and for the book.
What is the difference between coverage, NPL ratio and reserve ratio?
Coverage is provisions divided by non-performing loans. The NPL ratio is non-performing loans divided by gross loans, and the reserve ratio is provisions divided by gross loans.
How many years of charge-offs do provisions cover?
Divide provisions by net charge-offs over the last twelve months. The result is the years of charge-offs covered.
Why can a book’s coverage hide under-covered segments?
Surplus provisions in one segment do not cover a shortfall in another. The book’s average can therefore look closer to the target than the segment-by-segment shortfall.
How do I calculate provisions needed to reach a coverage target?
For each segment, multiply non-performing loans by the target coverage and subtract provisions held. The shortfall is counted segment by segment and cannot be below zero.