Sales of European NPLs hit a four-year low last year with €67.7bn of assets sold, a new study shows.
Debtwire’s NPL report shows that across Europe, the pandemic delayed portfolio sales and agreements fell apart as the economic outlook deteriorated.
According to Debtwire, Covid-19 caused a stuttering start to the UK loan market in 2020, but the late closing of a sale in December pushed the total to £3.3bn (€3.6bn) sold. However, this was less than a third of 2019 sales, when £10.1bn (€11.4bn) was sold. Transaction volumes in 2020 were the lowest since 2015.
Amy Finch, data analyst at Debtwire, said: “Metro Bank sold a residential mortgage portfolio of gross book value £3bn to NatWest Group for £3.2bn in December. The bank is shifting its focus, as it acquired peer-to-peer lender RateSetter for £12m. After the purchase though, it sold RateSetter’s £167m property development loan portfolio to Shawbrook Bank – Metro Bank will use the platform to originate personal loans.”
The report revealed that Italy continued its role as the biggest NPL market in 2020, selling €38.9bn of loans, almost 60% of the total sold.
Finch said: “Banks set aside record levels of provisions to prepare for the next big wave of NPLs expected to arise from the pandemic.”