We estimate that identified non-core loan portfolios in the European banking sector now exceed €2.5 trillion, representing 6% of European banking assets.
The run-off or sale of these loan assets will continue for many years and will make up a significant proportion of future Merger and Acquisition (M&A) activity in the banking sector. There has already been increasing M&A activity in loan portfolio transactions, although it is still small compared to the overall size of non-core assets.
Based on our market knowledge and discussions with investors, we expect portfolios with a face value of €50 billion to trade in 2012 and €500 billion to trade in the next five to ten years.
In our second annual survey, we questioned over 50 major investors active in the European loan portfolio market.