Regulation driving change in European loan portfolio markets
The European loan portfolio market had a slow start in the first half of 2017 compared to the same period last year, as sellers and investors pushed deals into the second half of the year. However, with many ongoing deals in the pipeline for the second half of this year, 2017 is set to exceed that of the two previous years. One element that has tempered the pace of deals in 2017 has been the heavy regulatory load on potential NPL sellers in 2017. They are dealing with the European Central Bank’s new guidelines on NPL recognition and disposal strategy, the forthcoming adoption of IFRS 9 standards which will push banks towards a more forward-looking and rigorous approach to loss provision, and the European Banking Authority’s 2017 Transparency Exercise, which draws data from all significant Eurozone banks on current NPL exposure.
For detailed information please read the fifth edition of the Deleveraging Europe series about the European loans market including an up-to date overview of the latest transactions.
The ECB guidance on non-performing loans
EU finance ministers’ action plan and EU Commission consultation