Of Special Interest
Filters
- Newslink Trends-The Global Strategic Perspective
- Juniper Research says digital wallet users to exceed 4.4 billion by 2025, as mobile drives digital payments’ revolution
- Criminals exploit COVID-19 pandemic with rise in scams targeting victims online
- Equifax says Open Banking proving pivotal to pandemic lending
- Consumer confidence in banks, credit card providers and investments remain stable as demand supercharges digital finance says Toluna research
- Mintos says Europeans are starting to embrace investing
- US banks see IT modernisation as a way to improve customer experience
- Risk mitigation in global trade depends on digitisation-Andrew Raymond, CEO, Bolero International comments
- Juniper Research new study says the volume of B2B payments facilitated by non-banks will exceed 53 billion in 2022, from a COVID-related low of 38 billion in 2020
- CMA issues fifth publication over 3 years of the service quality league table of personal and business current account providers
- Barclays says scammers take advantage of COVID-19, cashing in on nations’ uncertainty
- S&P Global report says financial market infrastructure sector's earnings likely to cool off In second half
- Global banking market capitalisation slumps by over 30% amid pandemic says Buyshares research
- Digital wallet spend in Europe & North America to increase by 40% in 2019, finds study
- Juniper forecasts mobile money transactions will exceed 200 billion by 2024
- Banks can save the world from climate change, says former UN climate chief
- Research by NatWest reveals gender divide over attitudes to saving
- Europe’s big bank problem: too much capital is trapped in the US, says Scope
- Later-Life lending market set to almost double in the next 10 years, finds report
- Barclays/Cebr report challenges nation to think differently about wealth
- Fifth of UK investors looking to debt investment, new research reveals
- Regtech will play a more important role in PSD2, says Mitek
- Banks turn to Fintech partnerships to improve customer experience, finds Fraedom
- New industry code to tackle fraud must deliver, says Which?
- New TTF report highlights loss of trust in financial services
- Arxan highlights financial app vulnerability epidemic
- SAS asks whether banks really need to choose between operations and innovation
- Which? raises alarm as almost 1,700 free ATMs become fee-charging
- Financial wellness affects half of peoples’ mental or physical health, finds report
- Study finds traditional financial institutions embrace Fintech disruption
- Grass is greener for environmentally friendly businesses, finds Barclays
- Prospective homeowners would consider a 40-year mortgage to escape renting, finds Santander
- Millennials’ needs are changing the face of banking industry, says new report
- FS is putting consumer data at risk by failing to protect mobile apps, says Arxan
- A lack of belief in their ability holds 28% women back in work, says Cambridge & Counties
- ‘Which?’ reveals Scotland has lost over a third of its bank branches in eight years
- Next downturn unlikely to be as bad as 2008, according to S&P
- FCA reveals findings from first cryptoassets consumer research
- US consumers favour single mobile app for banking and payments
- Banks suffering major IT shutdowns every day, ‘Which?’ reveals
- The US will be a key offshore centre in 2019, says GlobalData
- Debit industry changes markedly in 10 years of the Debit Issuer Study
- UK's ‘Big Five’ face ‘too big to compete’ as small challengers secure stellar returns
- Banks as vulnerable now as before crash, says new study
- Leverage ratio a constant conundrum for European and US banks, says SNL
27th July 2012
European banks carrying €1.5tr of non-performing loans
KPMG Portfolio Solutions Group estimate that European banks are carrying €1.5tr (£1.2tr $1.8tr ¥142tr Y11.6tr) of Non Performing Loan (NPL). Banks had been expected to dispose of significant NPL portfolios this year and have not yet done so. KPMG believe the combination of a poor market for such sales combined with very large amounts of cheap funds from the European Central Bank have encouraged the banks to carry the NPL.
Graham Martin, Head of the Portfolio Solutions Group and corporate finance partner at KPMG, commented: “A confluence of factors has restricted the much anticipated flow of transactions in the loan portfolio market. Perhaps the most powerful factor in delaying much-needed deleveraging by European banks has been the European Central Bank’s injection of more than €1 trillion of long-term refinancing operations (LTROs) in December 2011 and February 2012. The International Monetary Fund says that European banks need to shrink their balance sheets by $2.5 trillion, 75 percent of which is likely to come from asset sales. However the ECB’s three-year money has largely been used by banks to strengthen their balance sheets through profitable carry trades, reducing the pressure on them to sell non-core assets at non desirous prices.”
Nick Colman, director in the Portfolio Solutions Group at KPMG in Germany added: “There is a general view that cheap ECB money has reduced the urgency of asset sales in the short term. In terms of which types of loans are being affected, we are seeing delays in disposals of very large portfolios of long dated residential mortgages and project finance loans which are not necessarily heavily loss-making for the banks. However, we are still seeing a lot of activity in stressed and non-performing portfolios which are expensive from a capital perspective – such as commercial real estate - where value leakage for the bank is a key concern.”
Basel III is expected to bring pressure on bank to reduce the Risk Weighted assets and hence to sell some of this NPL.