It’s been a long and winding road for non-performing loans on European bank balance sheets. flow investigates how the last few years have presented some opportunities in the market across Italy and Greece
Southern Europe is a hotbed for non-performing loan (NPL) activity as embattled financial institutions gradually wind down their risky assets, which have successively ballooned in the years following the financial crisis. Market regulators including the European Central Bank (ECB) and European Commission (EC) have been leading the charge in pushing local banks to remove NPLs from their balance sheets.
The size of NPLs sitting on European bank balance sheets currently stands at €721 billion (as of April 2018), although this number is a notable improvement from one year ago when that figure was estimated to be at €759 billion 1. Despite the size of these intimidating on-balance sheet exposures, Deutsche Bank believes there are a number of opportunities (and challenges) in the NPL market across Italy and Greece.
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