European NPL outlook and transactions in key markets

Reported NPLs have continued to increase mainly driven by countries in Southern Europe (mainly Italy, Spain and Greece), along with Ireland. There are 6 countries, Germany, the UK, Spain, Ireland, Italy and France that are reporting NPLs in excess of €100bn in their banking system at the end of 2012 – a staggering total of nearly €900bn. With an uncertain economic climate it is difficult to forecast any meaningful reduction in aggregate across Europe and indeed we believe that reported NPLs in many countries will continue to rise over the next couple of years, adding further impetus to the already buoyant loan portfolio market.