Financial Advisory
Uncovering opportunities in 2017
Deloitte Deleveraging Europe 2016 ¡§C 2017
Introduction 01
Market overview 02
Viewpoint: Risks and opportunities in 2017
06
United Kingdom and Ireland 07
Viewpoint: Banks still need to face realityGermany and the Netherlands 13
Spain and Portugal 17
Italy 23
Viewpoint: Italy and Spain will lead
27
Austria and CEE 28
Greece and Cyprus32
Nordics 34
Viewpoint: Nordea sees slow growth in Nordic markets
35
Deloitte Portfolio Lead Advisory Services 36
Contacts 38
ContentsIntroduction
By the numbers
The record rate of loan disposals achieved in
2015 has been repeated again in 2016, with
just over €103 billion of completed deals for
the full year. Yet the Brexit-induced mid-year
pause in dealmaking had an impact on the
fnal deal numbers. The number of ongoing
deals at the end of 2016 is considerable, with
56 deals representing €70 billion by value.
Accordingly, we expect the deal rate to rise
in 2017, as paused deals are completed
and new markets open. We expect to see a
shift in the asset mix, as sellers move on to
market more performing, sub-performing
and complex portfolio structures.
Italy has already become the biggest loan
sale market by value in 2016 with €36 billion
in completed deals and even more ongoing.
While some uncertainty persists about the
recapitalisation of Italy¡¥s more troubled banks
several of which still hold signifcant NPLs on
their books, the overall direction of travel is
towards more, not less resolution of troubled
assets. Spain is also set for a record year
of transactions after just under €13 billion
worth of deals in 2016; an improving real
estate market will help make Spain among
the leading European loan sale markets in
2017. Portugal, which has yet to deliver a
signifcant deal fow, is likely to achieve more
than the €1.8 billion of completed deals in
2016, if pricing becomes more realistic.
Diferent markets, changing assets
These markets will take the lead from Ireland
and the UK, which are nearing the end of
their deleveraging journey. The asset mix
will also change: in markets such as Italy and
Spain we are already seeing more complex
loan portfolios coming to market, as the loan
sale market overall continues the inevitable
evolution from fully-provisioned unsecured
loans to more difcult-to-value real estate
and business asset secured loans.
Improving economies are bringing better
values for loan securities, while regulatory
pressure continues to push troubled banks
to face reality and resolve their NPL and
non-core issues. 2017 will see banks dealing
with more stringent accounting rules and
higher capital adequacy rules. This is an
ongoing process and we expect it will take
fve or more years of bank restructuring
and risk reduction before the demands of
regulators and the capital resources of banks
The European loan portfol
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