European loan sales hit record high in 2017
SALES of European loans reached a record high of €144bn (£124.3bn) last year, according to research from Deloitte.
The big four accountancy firm said activity in the European loan portfolio market during the second half of the year reached €104bn. This pushed the total past the records set in 2015 and 2016.
Several large one-off deals helped the market reach the total, including the €30bn portfolio sold by Santander following its takeover of Banco Popular and the €17.5bn Project Ripon from UKAR.
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“2017 has seen the largest single transactions since the onset of the financial crisis,” said Andrew Orr, global head of transactions of portfolio lead advisory services at Deloitte.
“Looking ahead, we expect another very active year in the Irish, Italian and Spanish markets, and we expect Greece to be more prevalent.
“With €52bn in reported ongoing transactions and a busy deal pipeline, 2018 is set to be another eventful year, with total volumes likely to exceed the €100bn mark for the fourth year running.”
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On a country-by-country basis Spain recorded the highest volume of non-performing loan (NPL) sales with €51.7bn. It was followed by Italy with €47.3bn NPL sales and the UK with €21.8bn.
“According to the latest European Banking Authority transparency exercise, NPL ratios in one-third of the 25 jurisdictions covered by the survey are still above 10 per cent, and the absolute levels of NPLs remain high at €893bn,” added Orr.
“Also, regulatory pressure continues to build and with the adoption of IFRS 9, we are going to see more proactive balance sheet management on an ongoing basis.”
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