Bouncing Back: NPLs And The Growing Secondary Market

In the non-performing loans arena, secondary deal activity has ramped up significantly due to maturing funds, the need to accelerate business plans, or investors reviewing their risk appetite given macro headwinds. There are several current defining factors influencing this, a boom of regulation to facilitate it, and technology and innovation playing an increasing role in the sector.

Michele Pedrotti, a director in Alvarez & Marsal's Portfolio Advisory Group in London, recently joined DDC'S 9th edition of the NPL Management Summit in Athens, Greece. The main takeaways of the session are summarised below:

Slow primary markets and a regulation boom

Despite the forecasts, for now there has been limited evidence of new generation of NPLs driven by the pandemic. Coupled with disposals of legacy assets continuing in markets like Greece and Italy, this means the primary market for European banks offloading bad debt has been relatively subdued in the last 12 months,