Services

Portfolio Lead Advisory Services

Strategic advice on deleveraging and loan portfolio transactions

Increasing regulatory pressure is driving banks to redefine their core businesses and search for capital.

Deloitte can assist with identifying ways to maximise value from non-core assets through deleveraging, rigorous planning and asset management. Entering the loan portfolio transactions market is a key tool in any deleveraging programme, providing a rapid source of capital raising. Furthermore, regulatory change and market pressures mean that capital optimisation is increasingly critical for financial institutions and the viability of their business models.

Your challenges

Banks face the enormous task of cleaning up their balance sheets and are under increased pressure from regulators and the market to demonstrate how they comply with stricter regulatory requirements. The challenge is to find ways to improve capital levels to meet this demand. This is driving banks to redefine their core business, pursue deleveraging strategies and seek to reinforce their capital structures in the most cost efficient way.

The European Central Bank has sent clear signals that banks need to prioritise reduction of non-performing loans and start focusing on future lending. Non-performing loans are a significant drag on a bank’s overall performance, both financially and operationally and selling these types of assets becomes a good option to not only improve capital positions, but allow banks to resume normalised lending levels which has a direct, positive effect on the wider economy.

How Deloitte can help

We advise holders, sellers and buyers of non-core assets and under performing loan portfolios in deleveraging, portfolio management and investment strategies. Working closely with financial institutions in their capital planning is also core to our business proposition.

Sell-side advisory 
  • Full service advisory to vendors of loan portfolios from strategy and portfolio preparation to sales execution
  • Situational and strategic options analysis enabling management to understand:
    • Portfolio selection
    • Balance sheet and capital impact
    • Profit and loss implications
    • Tax matters
    • Critical success factors
    • International investor requirements
       
Buy-side advisory
  • Assist loan portfolio buyers in all stages of the acquisition process, from pre-data room stage through to closing and post-deal servicing, including:
    • Pool stratification and statistics
    • Credit file and due diligence
    • Key asset summary and preparation
    • Investment committee presentation
    • Confirmatory due diligence
       
Strategic advisory
  • Assist clients in all phases of the deleveraging process from strategy development and exploring options through to implementation and value maximisation
  • Deleveraging plan design – what can be packaged and sold; what requires individual asset resolution; what infrastructure is required to deliver the deleveraging plan
  • Provide advice on best practice methodologies, policies, procedures and systems to support the process on an existing operation, a platform acquisition and the start-up for a bad bank or asset realisation vehicle

Balance sheet advisory
  • Assist clients with a comprehensive suite of balance sheet and capital solutions:
    • Capital advisory, target positioning and solutions: RWA optimisation, asset de-risking, issuance planning
    • Resolution planning and capital allocation
    • Credit risk management advisory and capital accretive asset-based solutions
    • Liquidity risk management advisory
    • Regulatory, rating agencies and investor support backed by comprehensive benchmarking

Key contacts

Alok Gahrotra

Alok Gahrotra

Partner

Alok is a Financial Advisory Partner in the Portfolio Lead Advisory Services team. He has over 20 years’ financial services experience, most recently specialising in loan portfolio acquisitions and sa... More

Austen Koles-Boudreaux

Austen Koles-Boudreaux

Partner

Austen Koles-Boudreaux joined Deloitte in March 2020 as a Partner to lead its Strategic and Balance Sheet Advisory function for financial institutions. He has over 20 years’ experience in the financia... More

Chi-nang Kong

Chi-nang Kong

Partner

Chi-nang is responsible for leading the Asia Portfolio Lead Advisory Services practice at Deloitte. Specialising in the FIG banking space, he has provided advice on bank turnaround to regulators, bank... More