Opportunity for investors and vendors alike - Q1 2017 market update

12 June 2017

  • European banks continue to hold more than €1trn of Non Performing Loans (NPLs)
  • Over €50bn of portfolio transactions have either completed, or are in progress as at the end of Q1 2017

Our research shows that, despite huge transaction volumes, European financial institutions continue to hold around €2.1trn of non-core loans*, split broadly equally between performing and nonperforming assets.

It is against this backdrop that completed or in progress transaction volumes have already reached over €50bn in 2017 and, we believe that for third year in a row, transaction volumes could exceed €100bn.

At our recent Bank Restructuring Conference there was a strong sense among attendees that, despite continued political and economic uncertainty, deal momentum remains strong. This spans a wide spectrum of activity: from non-performing and non-core asset sales; to strategic business portfolio adjustments (finding ‘better owners’ of assets and businesses); to collaborations and alliances on infrastructure, products, customers and technology innovation; through to opportunistic M&A.

In short, given the current performance of European banks and the large stock of non-core assets, there is still an enormous opportunity for investors and vendors alike.

Full report

To get full details of this quarter’s European bank loan portfolio transactions, download the report.

Find out how last quarter's European bank loan portfolio transaction market differs - Q4 2016 market update.

European Bank Restructuring Conference

In March 2017 we hosted our eighth European Bank Restructuring Conference, attended by more than 500 market participants from over 25 Countries. Our annual conference explores the opportunities opened up by restructuring in the European banking industry and how sellers, investors and other market participants can respond to them.

European banks are under mounting pressure to boost returns and lay the longer term foundations for competing in a market facing continuing technological, regulatory and political upheaval.

Our conference discussed the fundamental issues facing the European Banking market - banks need to boost returns and lay the longer term foundations for competing in a market facing continuing technological, regulatory and political upheaval.

Conference participants debated the causes of this continued underperformance – noting that some are largely out of the bank’s hands (e.g. subdued economic growth, low interest rates and a continuing stream of new compliance demands). However, some are clearly inherent within the industry itself including, for example, oversupply, operational inefficiencies and a continuing legacy of unwanted assets. To find out more about our 2017 conference, download the full conference report.

Do get in touch if you’d like to discuss any of the issues I’ve covered here.

*PwC estimate based on public information and discussions with banks

 

Richard Thompson |  Global Leader, Portfolio Advisory Group
Profile | Email | +44 (0)20 7213 1185

 

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