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Deloitte survey shows deleveraging is reversing single market in banking

Private equity, investment firms and non-European banks expected to be main buyers of divested loan books

25 October 2012

A banking report from Deloitte, the business advisory firm, highlights three trends that will emerge as a result of deleveraging by European banks. The report – ‘Capital gain, asset loss, European bank deleveraging’ – finds:

  • Deleveraging is reversing the single market as European banks sell assets in their home region of western Europe;
  • Private equity firms and investment firms are expected to be the main buyers of loan books;
  • Commercial real estate loans are expected to lead the next wave of divestments but will also be the trickiest assets to sell.

David Edmonds, portfolio lead advisory partner at Deloitte, said:

“Deleveraging will change the face of European banking, and our report predicts three trends will emerge. The single market in European banking will continue to reverse. European banks are already reducing cross-border lending and are planning to sell assets in their home region of western Europe.

“Second, private equity and investment firms are expected to exploit bank divestments. Thirdly, the Deloitte Bank Survey found that commercial real estate and corporate infrastructure loans will top the sales list, even though they are expected to be most difficult to sell. However, asset selection and portfolio shaping will be the key to successfully selling assets.”

Ends

Note to editors

About the Deloitte Bank Survey 2012
Deloitte surveyed 18 financial institutions across eight European countries to gather the banking sector’s views on the drivers, pace, volume and cumulative impact of bank deleveraging. In total these banks had assets worth €11trillion.

About Deloitte
In this press release references to Deloitte are references to Deloitte LLP, which is among the country's leading professional services firms.

Deloitte LLP is the United Kingdom member firm of Deloitte Touche Tohmatsu Limited (“DTTL”), a UK private company limited by guarantee, whose member firms are legally separate and independent entities. Please see www.deloitte.co.uk/about for a detailed description of the legal structure of DTTL and its member firms.

The information contained in this press release is correct at the time of going to press.

Member of Deloitte Touche Tohmatsu Limited

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David Gwyer
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Deloitte LLP
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+44 (0) 20 7007 9879
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dgwyer@deloitte.co.uk

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