A Global NPL Perspective

05 March 2019 - 09:37 am UTC

We are pleased to present A Global NPL Perspective, published in partnership with Ashurst.

Based on a survey of 103 senior-level executives, the report presents an overview of the global non-performing loans (NPL) market, aiming to better understand current buy-side investment priorities and the future pipeline for NPLs.

Key findings include:

  • Sellers expect to keep up supply of NPLs to the markets globally. 68% of financial institutions say that they are either very likely or certain to bring an NPL portfolio to market within the next 12 months. And 44% of financial institutions say their primary strategy for NPL reduction is transferring them outright on either a portfolio or single-name basis.
  • Sellers also agree on where they will face challenges. 44% of financial institutions say the large commercial credits sector presents one of their greatest NPL challenges. And 32% of financial institutions have notable issues with both commercial real estate-backed loans and consumer unsecured loans.
  • Buyers and sellers have their eye on different assets. 44% of buyers cite small/medium enterprise loans and large commercial credits as one of the top two asset classes that the market is more receptive to acquiring. For sellers, the most popular option (39%) is commercial real estate backed loans (excluding hospitality assets).
  • Hotspots in 2018. Italy is currently the largest NPL market in Europe, with 64 deals for a total gross book value of €103.6bn in 2018. This is followed by Spain, which saw 27 deals for a total gross book value of €43.2bn in 2018.
  • China is on investors’ radar for future investments: 55% of investors report that they are likely to invest in China in the next two years, with 33% saying they are certain they will do so.