A record year for portfolio transactions – 2015 European loan portfolio transactions total €140bn

Published at 12:17 PM on 09 March 2016

 

  • €140bn of loan portfolio transactions completed in 2015 – an increase of more than 50% vs 2014 levels
  • Appetite for performing portfolios continues to grow, with 40% of transactions by face value involving performing pools
  • There are approximately €100bn of deals currently in progress or being contemplated by vendors for 2016
  • Completed Italian transactions have accelerated in 2015, with growth in excess of 150% over 2014

 

Research released today by PwC’s Portfolio Advisory Group shows that during 2015 more than €140bn (£108bn) of loan portfolio transactions completed across Europe, an increase of more than 50% on 2014 sales of €91bn.

This makes 2015 the strongest year ever for portfolio transactions in Europe. In particular at €54bn, traded volumes in the UK were 151% higher than 2014 when €21.5bn of deals were agreed.

Last year saw a significant shift in investor appetite towards performing portfolios, accounting for around 40% of all completed deals. PwC estimates that European banks continue to hold around €2.3 trillion of unwanted, non-core and non-strategic assets, of which performing pools represent more than half of this amount.

Although many had expected to see a reduction in loan portfolio transactions in the UK and Irish markets, they have been the largest markets in 2015. PwC predicts that both of these markets will continue to be very active in 2016 with a number of significant transactions in the pipeline.

Perhaps reflecting the popularity of the retail mortgage market sector, transactions in the UK in particular were driven by a small number of bumper disposals of UK mortgages –securitisation structures are being used to provide funding for a number of these deals.

Italy has experienced the most significant increase in transactions, with growth in excess of 150% over 2014, as the long awaited programme of deleveraging by Italian banks gathered pace.

Richard Thompson, global leader of PwC's Portfolio Advisory Group, said:

"Market activity continues to grow year-on-year and our 2016 research and pipeline shows the market has no signs of abating in the short or medium term. It is possible that current volatility in the financial markets, combined with continuing pressures on the banking sector, could have a material impact on the availability of funding in the loan portfolio market.

“This could lead to reduced pricing and a return in a number of markets to a sizeable ‘bid-ask’ gap – which would be a significant drag on transaction volumes.

“However, absent such factors, with approximately €100bn of deals currently in progress or close to being brought to market, we believe that 2016 will be another very active year for loan portfolio transactions, with transaction volumes at similar levels to 2015.”

Ends

Note to editor:

Further detail is available via Richard Thompson's blog here: European loan portfolio transactions report

 


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