Sales of bad debt top €100bn in 2016 as Europe’s banks try to put crisis behind them

Thursday 16 February 2017 3:45 pm The stock of NPLs is seen as a major threat to the European banking sector by the European Central Bank (ECB). The “resolution of non-performing loans in the banking sector” is a “prerequisite” for further credit growth, according to the latest minutes from interest rate policymakers at the ECB.Read more: Big five banks run up £100bn bill in bad loans and legal costsDavid Edmonds, global head of portfolio lead advisory services at Deloitte, predicts continued growth in loan sales in the face of continued high demand.He said: “I believe European loan sales could surpass €200 billion this year. The ECB is sending very clear signals to the banking sector that it’s time to deal with the ‘hangover’ of NPLs left over from the last financial crisis and start focusing on future lending.”The loan books have been bought at knock-down rates by other banks and fund managers. Fortress Investment Group was the biggest buyer, according to Deloitte. The American investors recently bought a €17.7bn tranche of loans from Italy’s Unicredit.Private equity firm Cerberus was the second biggest buyer, followed by Lloyds Banking Group. Share European loan sales broke through the €100bn (£85bn) mark in 2016 as struggling banks look to offload big books of bad debt.Italian loan sales more than doubled year-on-year to comprise €36bn (£30bn), almost a third of the total European sales, according to analysis by Deloitte. whatsapp whatsapp Jasper Jolly Italy’s Unicredit was the biggest seller, followed by the Irish “bad bank” Nama (National Asset Management Agency).Read more: Italian parliament signs off on €20bn bank bailout fundThe UK banking sector saw sales reduce by two-thirds to €13bn (£11bn), reflecting relatively earlier moves to resolve vulnerabilities on banks’ balance sheets.[custom id=”200″]The sales of non-performing loans (NPLs) and non-core assets form part of efforts by banks to put the global financial crisis behind them. During the crisis default rates soared as debtors struggled to service loans. Loans are deemed to be non-performing if they have not been serviced for 90 days or more. More From Our Partners Inside Ashton Kutcher and Mila Kunis’ not-so-average farmhouse estatenypost.comRussell Wilson, AOC among many voicing support for Naomi Osakacbsnews.comMark Eaton, former NBA All-Star, dead at 64nypost.comPolice Capture Elusive Tiger Poacher After 20 Years of Pursuing the Huntergoodnewsnetwork.orgA ProPublica investigation has caused outrage in the U.S. this weekvaluewalk.comBrave 7-Year-old Boy Swims an Hour to Rescue His Dad and Little Sistergoodnewsnetwork.org980-foot skyscraper sways in China, prompting panic and evacuationsnypost.comAstounding Fossil Discovery in California After Man Looks Closelygoodnewsnetwork.orgNative American Tribe Gets Back Sacred Island Taken 160 Years Agogoodnewsnetwork.orgKiller drone ‘hunted down a human target’ without being told tonypost.comI blew off Adam Sandler 22 years ago — and it’s my biggest regretnypost.comKamala Harris keeps list of reporters who don’t ‘understand’ her: reportnypost.com‘Neighbor from hell’ faces new charges after scaring off home buyersnypost.comWhy people are finding dryer sheets in their mailboxesnypost.comPuffer fish snaps a selfie with lucky divernypost.comBiden received funds from top Russia lobbyist before Nord Stream 2 giveawaynypost.comFlorida woman allegedly crashes children’s birthday party, rapes teennypost.comConnecticut man dies after crashing Harley into live bearnypost.com Sales of bad debt top €100bn in 2016 as Europe’s banks try to put crisis behind them

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