European Investor Insights 2012

Investor appetite continues to grow

We estimate that identified non-core loan portfolios in the European banking sector now exceed €2.5 trillion, representing 6% of European banking assets. The run-off or sale of these loan assets will continue for many years and will make up a significant proportion of future Merger and Acquisition (M&A) activity in the banking sector. There has already been increasing M&A activity in loan portfolio transactions, although it is still small compared to the overall size of non-core assets.

Based on PwC's market knowledge and discussions with investors, we expect portfolios with a face value of €50 billion to trade in 2012 and €500 billion to trade in the next five to ten years.

In PwC's second annual survey, over 50 major investors active in the European loan portfolio market were questioned:

  • Investors have accumulated nearly €60 billion to invest in non-core European loan assets
  • Portfolios with a face value of €50 billion expected to change hands this year
  • Less than one in five think debt financing for this will be  difficult to raise