European banks 'holding trillions' in non-core loans

14 April 2011

European banks are holding what they consider non-core loans to the tune of trillions of euros, a new report has found.

Carried out by PricewaterhouseCoopers (PwC), the study revealed the institutions are carrying more than €1.3 trillion ($1,885 billion) in such tie-ups - and it will take them the next decade to try and run them down or sell them off.

The investigation showed that the amount calculates at €2,600 for every person within the European Union.

Authors of the report stated: "As well as price, the high degree of strategic analysis and data due diligence required in a more circumspect business climate is significantly slowing things up."

PwC highlighted non-performing loans as another challenge, with these deals totalling €225 billion in Germany last year, followed by Britain at €175 billion.

The European Banking Authority recently suggested its stress tests for banks on the continent are likely to be more stringent than they were in 2010.

By Claire Archer

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