Report: European banks ramping up asset disposal

31 July 2012

Major banks across Europe got rid of nearly as many of their non-core loan assets in the first six months of 2012 as they did in the whole of last year, a new study has found.

Research conducted by PwC established that leading financiers have disposed of some €27 billion ($33 billion) of these products so far this year as they seek to restructure their balance sheets.

The report estimated that non-core portfolios worth around €50 billion will be sold by the end of 2012, but added that the quality of such assets is unlikely to improve because of the impact of ongoing austerity programmes.

In total, non-core loans are thought to be worth around €2.5 trillion, with weaker eurozone member states Spain, Italy and Ireland leading the way in terms of increases this year.

Richard Thompson, European portfolio advisory group partner at PwC, observed: "The golden age of distressed debt investing is not yet upon us, but we strongly believe the market has significant room for growth."

By Gary Cooper

Become a bobsguide member to access the following

1. Unrestricted access to bobsguide
2. Send a proposal request
3. Insights delivered daily to your inbox
4. Career development