Etude
French Banking & NPL Portfolio Outlook 2024
In our yearly analysis of the French NPL market, we explore the major trends and insights set to influence the coming year. From macroeconomic challenges to regulatory changes, our findings offer a comprehensive overview of how banks, financial investors, and debt servicers are adapting to a shifting environment. The data not only sheds light on current market dynamics but also reveals emerging opportunities and risks, providing a strategic guide for stakeholders navigating the French NPL sector.
As the French NPL market continues to evolve, several trends are emerging that will shape the future of the sector. Economic headwinds and regulatory reforms are creating both challenges and significant opportunities for market players. Rising credit risk is testing resilience, while ongoing regulatory shifts demand agility. In this context, the study highlights key insights into the current state of the French portfolio market, alongside exclusive findings from our NPL survey.
Part one: The NPL market and Deloitte perspectives for 2024
Steady growth amidst uncertainty
While France's economy shows stability and modest growth, rising corporate bankruptcies and household over-indebtedness highlight potential credit risk in the near term.
Resilience under credit strain
Despite strong capital buffers, French banks face mounting pressures from rising NPL volumes and growing credit risks, especially in SME and consumer segments.
Growing transactions, evolving strategies
While transaction volumes increase, mounting regulatory pressure and fluctuating capacity challenge banks and investors to adapt to shifting market dynamics.
Shaping the future of NPL management
Ongoing regulatory reforms, including the Credit Servicers Directive, continue to reshape the French NPL market, driving greater transparency and alignment with EU standards.
Part two: Survey results and outlook for the NPL market
Economic pressures shift expectations
As France faces economic challenges, most respondents expect rising NPL ratios in the coming year, with consumer and SME loans asset classes seen as most vulnerable.
Investors embrace the market
With 83% of banks selling portfolios in the past two years, debt servicers remain the dominant buyers, while growing investor interest signals new opportunities for market expansion.
Optimism amidst evolving challenges
While most investors and banks foresee rising NPL sales, market hurdles like pricing gaps and limited servicing capacity continue to shape transaction dynamics.
Navigating regulatory shifts
As new regulations drive improvements in transparency, the focus on servicing capacity and compliance remains central to shaping market participation.
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