Banks 'disposing of debts through loan book sales'

6 March 2012

Banks are opting against selling off real estate assets in favour of making loan book sales in order to dispose of their debts.

That is according to Peter Sudell, chartered surveyor and executive director at BNP Paribas Real Estate, who believes this practice is becoming increasingly commonplace in the midst of the eurozone debt crisis.

Mr Sudell explained that the majority of analysts in the industry expected the last few years to witness a greater number of enforced sales as financiers struggle to restructure their balance sheets following the recession.

However, the official went on to say that a lot of companies have found this process to be "long-winded" and "painful".

"It is far easier disposing of your book en masse to a third party provider ... than actually going through on a granular basis, asset by asset," he said during a webinar for Property Week.

This comes after Paul Tucker of the member of the Monetary Policy Committee said that UK banks are continuing to operate in an "extraordinarily risky environment".

By Gary Cooper

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