In an EU-wide 'transparency exercise', the EBA analysed 105 banking institutions from 21 countries across the EU and Norway, with a total of around €30 trillion in assets, which amounts to more than 67% of total EU banking assets, it said.
The bad debt percentage is closer to 10% when lending to other financial institutions is disregarded, the EBA said.
In more positive news, banks have improved their capital position to a CET1 ratio of 12.8%, well above the regulatory minimum and up from 11.1% in December 2013, the EBA said.
Banks have been able to gradually increase lending to retail and corporate customers in the first half of 2015, with an increase in cross-border lending also evident, the report said.
The data also showed that a "home bias" when investing in sovereign debt is still relevant but gradually receding, the EBA said.
Piers Haben, director of oversight at the EBA said: "This transparency exercise, the EBA's fifth annual release of consistent bank-by-bank data, demonstrates an increasing resilience in the EU banking sector as capital levels have strengthened further. Nonetheless, EU banks will need to continue addressing the level of non-performing loans which remain a drag on profitability."