Euro loan sell off to continue this year, say PwC
European banks are set to divest a record €139bn of loans this year, led by the UK, as the industry accelerates asset sales to meet new rules, according to PricewaterhouseCoopers.
Banks have offloaded €54.5bn of debt and a further €84bn of loans are in the process of being sold, PwC said in a report. The UK and Ireland account for more than 60pc of deals in progress this year, after disposing of €125bn in the five years through 2014.
UK banks are expected to sell another €42.5bn this year, raising the total for 2015 to €56bn, PwC estimated. Ireland may account for €18.5bn of sales. Spanish lenders, with about 15 deals in progress, will dispose of about €20bn in total, with German and Italian banks expected to sell €22bn and €16bn respectively.
"It is no surprise the UK and Ireland, followed by Spain, have been the most active portfolio transaction markets in Europe given that banks locally have been very active in cleaning up their balance sheets," said Richard Thompson, chairman of PwC's European portfolio advisory group. "Italy has seen a large increase in activity in 2015 and is one of the main focus areas for international investors and funds."
Banks have been shrinking their balance sheets since the crisis to comply with regulations that require them to maintain capital ratios.
Hedge funds and private-equity firms are among buyers of the loans as they seek to gain exposure to the recovering British and European economies, which has boosted competition and prices this year, PwC said.