€15bn of Irish loans to be sold this year, predicts PwC analyst

About €15bn worth of loans, mainly via Nama and IBRC portfolios, are expected to be sold this year, with Ireland once again playing a leading role in increased levels of non-core loan transactions in the European market.

PwC analysis shows a record level of €64bn worth of European loan portfolios were sold last year.

British banks topped the transaction table, with €23.5bn worth of deals, but the overall total was also heavily driven by activity in Ireland, Spain and Germany.

Commercial real estate and unsecured retail loans comprise the bulk of loan assets currently being sold and PwC is estimating that European banks are sitting on €2.4 trillion worth of non-core loan assets, with around €80bn to be sold across the continent this year.

“Transaction activity is fuelled by the continuing need of many European banks to reduce the size of their balance sheet and restructure their operations,” according to Aidan Walsh, partner at PwC Ireland.

The €64bn sales figure, represented a 40% increase on the previous year and more increases are likely, including in Ireland where banks — not just Nama and the IBRC — will continue their deleveraging programmes over the coming months.

“Bank restructuring will continue over at least the next five years — with activity likely to be fuelled by the findings of the eurozone-wide asset quality reviews and stress tests currently underway,” Mr Walsh added.

Also expected to continue is the loan buyer profile.

Private equity houses and hedge funds proved the main buyers of loans last year.

“We expect that to continue in 2014 due to the significant amounts of investment funds raised and the availability of debt financing; especially for more established players in the sector.

“We are in contact with over 150 investment groups looking to invest in the European market.

“For 2014, we expect property-backed lending to remain the most active asset class.”