NPLs
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Positive prospects?
CRE tops Stage Two allocations
Commercial real estate loans were allocated the largest share of Stage Two classifications, according to the latest EBA data. This coincides with an overall growth in Stage Two allocations following the coronavirus crisis, as well as a boost in significant risk transfer transactions backed by Stage Two exposures and commercial real estate.
According to the EBA’s latest risk .......
News 8 December 2021
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Winding down
European ABS/MBS market update
The European ABS/MBS primary market appears to have begun winding down for year-end this week. With softening prices, macroeconomic concerns and the upcoming festive season, it seems that participants are already looking ahead to 2022.
“For me the year is already over,” says one ABS/MBS trader. “Most issuers have already come to market and the ABS market is .......
News 3 December 2021
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GACS pair print
Mixed NPE pool debuts
A pair of Italian non-performing loan securitisations have closed over the past week that are expected to benefit from the GACS government guarantee (see SCI’s Euro ABS/MBS Deal Tracker). UniCredit has completed OLYMPIA SPV, its third GACS ABS and the fourth for the UniCredit Group, under its non-core portfolio disposal programme. Most recently, Iccrea Banca has finalised the .......
News 30 November 2021
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Restructurings eyed
Real estate and hospitality assets targeted
Arrow Global’s new corporate restructuring unit in Portugal is expected to focus on the real estate and hospitality sectors (SCI 25 November). The move comes as moratoria in the country draw to an end amid a scarcity of capital for local corporates.
The new business builds on Arrow Global’s experience and capabilities in Portugal through its Whitestar .......
News Analysis 30 November 2021
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Nascent asset class
Non-performing lease ABS tipped for growth
Issuance of ABS backed by Italian non-performing leases is expected to reach €1bn over the next year, partially driven by increased defaults following the expiry of payment holidays. Recent legal developments and GACS-eligibility of the assets should also facilitate securitisation activity.
“The recent market conditions and legal framework developments have facilitated non-performing lease securitisations. The key challenges for .......
News Analysis 18 November 2021
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Evolving landscape
Consolidation, fintech driving banking evolution in Ireland and the UK
Consolidation among lenders and the proliferation of fintechs is driving change in the Irish and UK banking sectors. This Premium Content article investigates the impact on the jurisdictions’ RMBS markets.
The banking landscape in Ireland and the UK continues to evolve. Along with consolidation among lenders, the growing market share of fintech platforms is supporting dramatic changes in financial ......
News Analysis 9 November 2021
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Irish rebound
Second NPL securitisation marketing
Another Irish non-performing loan securitisation has hit the market less than a month after the Rathlin Residential 2021-1 RMBS priced (see SCI’s Euro ABS/MBS Deal Tracker). The move is in line with the expected growth and post-Covid recovery of the market in the second half of 2021 (SCI 23 July).
Dubbed Portman Square 2021-NPL1, the latest .......
News 8 November 2021
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Positive prospects?
Legal changes open up Turkish NPL opportunities
Recent amendments to Turkish law potentially open doors to international investors seeking opportunities in the Turkish non-performing loan market. However, although activity could pick up in the unsecured space, questions remain about secured and lumpy pools.
Under the legislative changes, asset management companies (AMCs) may establish funds to issue ABS. Indeed, by doing so, AMCs have now been .......
News Analysis 29 October 2021
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Future-proofing credit portfolio management
John Pellew, principal, distribution and securitisation, Arr...
It has become a bit of a cliché to say that technology, data, analytics – and importantly – the appropriate application of such tools has become fundamental to running a successful business. And yet, despite the regularity with which the topic is discussed, how precisely this applies to the distressed loans market has not been fully appreciated.
For .......
Talking Point 26 October 2021
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Challenging valuations
Covid-19 aftermath dogs NPL exposures
The aftermath of the coronavirus crisis is hindering the valuation of properties that back European non-performing loan transactions. Nevertheless, collections have picked up and more NPL ABS issuance is expected.
According to Moody’s, the deterioration in the quality of the valuation of properties underlying securitised exposures in new trades can be ‘’explained by the increased difficulty in carrying .......
News 14 October 2021
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Untapped markets
French NPLs gaining attention
Southern European jurisdictions continue to witness strong activity in the non-performing loan space, especially in Greece and Cyprus. At the same time, investor interest in French NPLs is on the rise.
“Investors are looking further afield for opportunities in such markets where others aren’t necessarily looking. They are exploring opportunities everywhere that they can,” observes Amo Chahal, md .......
News 6 October 2021
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New frontiers?
Prospects for further NPL ABS guarantee schemes weighed
Given the success of both GACS and HAPS in facilitating the development of a market for non-performing loans, and consequently bank deleveraging, could similar government-backed measures emerge in other European jurisdictions? This Premium Content article examines the prospects for the introduction of further national guarantee schemes.
Italy and Greece appear to have embraced the most efficient model for de-risking ......
News Analysis 23 September 2021Premium Content
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Strong opportunities
European NPL investment trends discussed
Emerging non-performing loan opportunities across a number of jurisdictions in Europe are boosting sentiment in the market, with particularly strong demand seen in Italy. However, challenges are anticipated in this jurisdiction for transactions that are more complex in nature, according to participants at SCI’s 3rd Annual NPL Securitisation Seminar.
“The Italian NPL market is currently very active, with .......
News 15 September 2021
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Chinese reserves
Growth boosts domestic securitisation market
China’s continued economic growth has boosted both securitisation performance and issuance volumes. However, bank asset quality remains at risk because of high economic uncertainties from the lingering pandemic threat and ongoing structural adjustment in the economy. Yet bank asset metrics benefit from continued disposal of bad debts using their substantial loan loss reserves.
According to the latest Moody’s .......
News 10 September 2021
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Low delinquencies - for now
Delinquencies give few alarms but asset quality slump pending
While aggregate delinquency data currently looks benign, asset quality is expected to deteriorate as support programmes come to an end.
Up to date aggregate delinquency data, while masking some divergence, holds no terrors, notes Scope Ratings. The NPL ratio for EU-headquartered banks fell to just 2.5% at the end of 1Q21, according to ECB numbers, while gross euro area NPLs more than .......
News 2 September 2021
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Tight deadline
PRA NPE ABS consultation to 'provide momentum'
The UK PRA’s consultation - which ended earlier this month – regarding the implementation of Basel standards in connection with non-performing loan securitisations has been welcomed by the industry. The authority is seeking to introduce a framework for non-performing exposure ABS, following the implementation last year of a revised securitisation capital framework via the CRR and the publication of .......
News 27 August 2021
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Simulation analysis
Covid-19 boosts capital ratios
UK and EU bank capital ratios have increased over the past year, despite the effect of the pandemic on profits. Nevertheless, the Covid crisis has exacerbated many of the difficulties related to generating returns, so analysts expect the environment to remain challenging for the European banking sector.
According to KPMG, UK banks saw a 150bp improvement in common .......
News 13 August 2021
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Debt servicing spin-off inked
Sector developments and company hires
Debt servicing spin-off inked
Credito Fondiario Banking Group has demerged its debt purchasing and servicing activities in favour of the newly established Gardant Group. As part of this reorganisation, it has redefined the bank's mission as a challenger bank, specialising in financing solutions for SMEs and corporates. The two companies will operate independently going forward.Panfilo Tarantelli has been .......
Market Moves 6 August 2021
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Scalabis strikes
Algebra brings Portuguese NPL ABS
Algebra Capital is in the market with an unusual Portuguese non-performing loan ABS. Dubbed Scalabis STC (compartment Panda), the securitisation is backed by a €1.47bn portfolio that was acquired through two investment vehicles – LX Investment Partners II and III – from Banco BPI, Banco Comercial Português, Caixa Geral de Depósitos, Caixa Leasing e Factoring and Novo Banco between .......
News 6 August 2021
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Disposals pending
Irish NPL activity set for rebound
The Irish non-performing loan market is set for a rebound in the second half of the year, following a hiatus due to the coronavirus crisis. Indeed, owner-occupied residential mortgages are expected to be a major area of focus for banks as they develop their future strategies against the backdrop of a post-Covid economy.
Ireland has been one of .......
News 23 July 2021
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Asset quality boon
EU bank credit conditions normalise
Credit conditions for European banks are normalising and prospects for the second half of the year look positive. A return to pre-coronavirus crisis operating income with higher loss absorption buffers accumulated during the pandemic should facilitate the management of non-performing loans.
According to Scope Ratings, credit risk has frozen in time, due to the extraordinary support measures available .......
News 21 July 2021