The global credit sales market returned to growth last year, with total sales of mortgage-backed mortgage loans reaching 114 billion EUR. Although 2017 was record for credit transactions, the amount of non-performing loans (secured, unsecured and corporate) held by European banks has reached approximately 1 trillion EUR.
Despite the huge volume of unsold loans in 2017, small transactions prevailed in the market. The top five transactions were linked to portfolios in excess of 4 billion EUR and amounted to 75 billion EUR, which is 66% of total sales.
Other 93 transactions were with an average portfolio size of 421 million EUR. In addition, in 2017 the share of sales of loans secured by residential property increased. They accounted for 46% of total sales compared to 30% in the previous year.
A number of countries, including the UK and the Netherlands, are at the end of their program to curb non-performing loans, and investors are focusing on less mature markets such as Italy, Portugal and Greece, which still have to deal with a significant supply of non-performing credits. Italy and Spain dominate sales before 2017. Spain has reached the highest volume of non-performing credit sales, with transactions totaling 52 billion EUR, while Italy has been the most active market in terms of volume with 33 transactions, amounting to a total of 32 billion EUR.
The Spanish market was dominated by two major transactions amounting to 43 billion EUR. Ireland remains an exception and still has to deal with a significant amount of non-performing loans after banks have renounced their lending strategies in 2017
The recovery of markets, especially in southern Europe, has gained strength and we are predicting that they will continue to be the main driver of the market in 2018. In addition, after a break in operations in 2017, Irish banks are returning to their lending programs, so sales out there are expected to exceed 11 billion euros this year.