European outlook for non-core and non-performing loans
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We estimate that identified non-core assets in the European banking sector exceed €1.3trn whereas non-performing loans (NPLs) for key European markets total €781bn. Given that the average annual financial services M&A market between 2003 and 2010 totalled just €70bn, we estimate that correcting the balance sheet may take more than 10 years.
The above publication provides an overview of the key European markets in relation to non-core and non-performing loan (NPL) assets.
The need for a clean balance sheet
European banks face the enormous task of cleaning up their balance sheets and are currently facing increased pressure from regulators and the market to demonstrate how they plan to comply with the new stricter regulatory requirements.
Failure to extract the maximum value from their NPLs will increase pressure on the bank’s profitability and may hinder their ability to meet the stricter solvency criteria currently being contemplated by the regulatory authorities
Get on top of your portfolio
The whole process for assessing the value maximising options for a given portfolio of loans can be hugely time consuming and labour intensive. The Portfolio Advisory Group specialises in the provision of both strategic and transactional advice in connection with non-core or distressed loan portfolios.
Our team combines a global perspective on the market with in depth local knowledge gained from our advisory work on hundreds of portfolios over the past few years. For the holders of such portfolios our mission is to assist you in maximising your returns.
Our advice stretches from an assessment of the options for different tranches taking account of such matters as capital, accounting and tax through to buyer appetite, potential pricing in the market, advice as to how to present a portfolio to potential investors and full management of the sales process.
For buyers of portfolios we can provide due diligence and pricing advice together with general support around the potential deal including, for example, advice on structuring, tax and regulatory considerations.
