Non-performing and impaired loans

Loan portfolio divestments, whether by way of sale or securitization, continue to make headlines and the prospect of increasing impairments in the coming year has drawn wide commentary regarding the impact on loan exposures in several key industries disproportionally impacted by the pandemic.

Drawing on our experience of several of the most high-profile disposals and acquisitions of performing and non-performing loans, we have created this hub to guide both buyers and sellers on the key areas to be considered in the context of the sale or acquisition of a loan portfolio across key sectors, in addition to providing insights on areas that will regularly be the basis for detailed negotiations.

NPL video series

Non-performing loans: The increasing role of technology in distressed loan transactions

In the fifth video in the series, Simon Lew and Victoria Birch discuss the increasing role of technology when dealing with distressed loan transactions and what they are seeing in the market.

United Kingdom | Video | July 06, 2021

Non-performing loans: Specific issues in trading impaired and non-performing shipping loan portfolios

In the fourth video in the series, Alan Bainbridge and Simon Lew discuss some of the specific issues that arise when trading impaired and non-performing shipping loan portfolios.

United Kingdom | Video | June 22, 2021

Non-performing loans: Specific issues in trading impaired and non-performing aviation loan portfolios

In the third video in the series, Alan Bainbridge and Simon Lew discuss some of the specific issues that arise when trading impaired and non-performing aviation loan portfolios.

United Kingdom | Video | June 10, 2021

Non-performing loans: Transferring derivatives linked to non-performing loans

In the second video in the series, Daniel Franks and Victoria Birch discuss some of the common issues that arrive when transferring associated hedges and swaps books.

United Kingdom | Video | May 27, 2021

Non-performing loans: Consideration structures and where mistakes are made

In the first video in the series, Alan Bainbridge and Simon Lew discuss consideration structures when used in non performing loan portfolio sales.

United Kingdom | Video | May 07, 2021

Further insights

The European Commission’s Action Plan to tackle non-performing loans in the aftermath of the COVID-19 pandemic

The outbreak of the COVID-19 pandemic in the past year evoked a whole series of unprecedented emergency measures. The European Commission’s COVID-19 banking package, aimed at ensuring that banks were able to continue lending, and the decisive action of member states to alleviate liquidity difficulties, helped borrowers with temporary liquidity problems and prevented a surge in non-performing loans (NPLs), providing stable short-term relief for the European economy.

Global | Publication | June 01, 2021

$What’s on the horizon for financial services firms? <br \>Non-performing loans$

What’s on the horizon for financial services firms? Non-performing loans

United Kingdom | Webinar | June 17, 2020

Banking reform updater: EBA consultation paper on draft guidelines on loan origination and monitoring

This summer the European Banking Authority (EBA) published a consultation paper containing draft guidelines on loan origination and monitoring.

United Kingdom | Publication | October 11, 2019

Banking reform updater: non-performing loans

This summer the media reported that the European market for non-performing loans (NPLs) was becoming more active, with Italy and Spain accounting for most of the deals. According to the European Cent...

Global | Briefing | August 31, 2018

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Latest blog posts

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Commission consults on improving transparency and efficiency in secondary markets for non-performing loans

On 16 June 2021, the European Commission issued a targeted consultation designed to gather evidence on improving transparency and efficiency in secondary markets for non-performing loans (NPLs).

Non-performing loans: deal struck on EU rules for selling NPLs to third parties

On 7 June 2021, the European Parliament (EP) issued a press release stating that EP negotiators and the Council of the EU have agreed on the proposed Directive on credit servicers, credit purchasers and the recovery of collateral.

Implementation of Basel standards: Non-performing loan securitisations

On 3 June 2021, the PRA published Consultation Paper 10/21 ‘Implementation of Basel standards: Non-performing loan securitisations’ (CP10/21).

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EBA Discussion Paper – Review of the NPL transaction data templates

On 4 May 2021, the European Banking Authority (EBA) published a Discussion Paper intended to facilitate the review of the standardised non-performing loan (NPL) data templates.

Changes to the EU Securitisation Regulation

Regulation (EU) 2021/557 and Regulation (EU) 2021/558 (together, the Regulations) were published in the Official Journal of the European Union on 6 April 2021 and came into force on 9 April 2021.

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Non-performing loans: Vote on EU rules for selling NPLs to third parties

On 14 January 2021, the European Parliament announced that its Economic and Monetary Affairs Committee (ECON) had agreed on the text of the draft Directive on credit servicers, credit purchasers and the recovery of collateral.

Tackling non-performing loans (NPLs) to enable banks to support EU households and businesses

On 16 December 2020, the European Commission published its strategy to prevent a future build-up of non-performing loans (NPLs) across the EU, as a result of the COVID-19 pandemic.

Capital treatment of securitisations of non-performing loans

On 26 November 2020, the Basel Committee on Banking Supervision published a technical amendment ‘Capital treatment of securitisations of non-performing loans’.