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Rebuilding balance sheets

Portfolio Lead Advisory Services

Banks need to evaluate their loan portfolios, analyze their strategic options, and recover value from their non-core, under-performing, and illiquid financial assets.

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Approximately €2.5 trillion of non-core assets and non-performing loans reside on the balance sheets of European banks.  As the Eurozone financial crisis has evolved, however, there’s been a significant shift in the strategy of financial institutions towards deleveraging and balance sheet management. This in part reflects their response to a range of challenges, including increased capital adequacy requirements (both the level and quality of capital) and funding pressure due to the reduction in inter-bank lending.

A number of institutions that received bailout monies are under additional pressure to divest certain parts of their business and comply with state aid requirements.