http://bit.ly/PortefeuillesCreances2014 D’après une étude publiée par le cabinet d’audit et de conseil PwC, 67 milliards d’euros de portefeuilles de créances (valeur faciale) ont été cédés par les banques européennes au cours des neuf premiers mois de l’année 2014. PwC estime en outre à 50 milliards d’euros la valeur des portefeuilles faisant actuellement l’objet de transactions. La majeure partie de ces transactions devraient être conclues d’ici à la fin de l’année, ce qui signifie que la valeur des portefeuilles de créances non stratégiques cédés par les banques devrait largement dépasser 100 milliards d’euros en 2014, soit une hausse d’au moins 50% par rapport à 2013 (64 milliards d’euros).

1. Portfolio Advisory Group
Market update (9 months 2014)
November 2014
Click to launch

2. 2
European NPL outlook and transactions in key markets
Richard
Thompson
Chairman,
European Portfolio
Advisory Group
PwC (UK)
Welcome to our Q3 2014 market
update, in which we provide an
overview of the activity levels in the
European non core asset market so
far in 2014 and likely forecasts for
the reminder of the year.
The European market continues to display
unprecedented levels of activity, making
2014 the most active year on record.
One of the key talking points over the last
few months has been the European
Central Bank (“ECB”) stress tests and
Asset Quality Reviews. With the results
finally in, there is further evidence that
the lively transaction markets within
Europe are set to continue well into next
year.
The results show, as many have predicted,
that a number of banks, out of more than
120 tested, will need to take some
remedial action.
Whilst 25 banks have been judged to be
short of capital as at the 31 December
2013 testing date, 12 of these are
technical failures as they have since raised
new capital. For the remaining 13 there is
now a requirement to prepare a
remediation plan to address their capital
shortfall. Along with many commentators
I predicted that Italian banks were likely
to be under the spotlight and 4 of these 13
are Italian.
Although much of the speculation leading
up to the publication of the results has
focused on how many and which banks
will fail, I believe such speculation misses
a broader point. For the first time, we now
have more than 10,000 data points on a
consistent basis concerning bank balance
sheets. This will provide the market and
investors with a rich data set to compare
and contrast the state of the Eurozone’s
banks.
Whilst the act of failure provides an
immediate need for clean-up and new
capital for a few banks, I think, in the end,
it will be the market that provides the
impetus for continued (much needed)
restructuring of the banking sector. In a
world with long term changes in trade
flows, increasing costs of regulation and
increased operational risks, too many
banks continue to hold assets which are
likely to remain poorly performing for at
least the medium term, or do not fit with a
viable longer term business model.
The disposal of non-core lending by banks
has reached new highs in 2014, as
illustrated in the following pages, with the
face value of loan portfolios transacted
likely to exceed €100bn this year. Whilst
the immediate impact of the ECB review
might not lead to a sudden spike in
transaction volumes, as market pressures
come to bear, transaction volumes will
remain high for the foreseeable future.
In terms of what we are seeing in the
market right now, while a lot of the
transactional activity to date has been
non-performing portfolios, we are seeing
an increasing number of transactions
involving performing portfolios. With new
sources of lower-cost money entering the
market, there’s an appetite for such
portfolios, as well as a developing focus
from some investors on building large
scale financial services businesses. CRE
transactions continue to be the most
traded portfolio type, however Q3 has
witnessed significant activity in the trade
of retail portfolios, a trend which we think
will continue for the remainder of 2014
and into 2015.

3. Transaction climate 2014/15 and ECB stress test capital shortfalls
3
Netherlands
United
Kingdom
Ireland
Spain
= Total capital shortfall per country for the 13 banks which have been identified as needing to raise more capital (€bn).
Source: ECB stress test results and PwC information and analysis
0.9
0.9
0.3
1.2
3.3
2.7
0.1
0.2
Nordics
Germany
CEE
Italy

4. €67bn of loan portfolios have traded in the first nine months of 2014
We expect the total volume traded in 2014 will surpass €100bn
The large increase in Ireland is primarily due to the €117bn
IBRC portfolio sales of approximately €19bn
completing in early 2014.
In progress, €50bn
The high volume of UK transactions in 2013 was
mainly driven by portfolio sales by Lloyds Banking
Group.
Netherlands, €2bn Italy, €6bn
120
100
80
60
40
20
Source: Publically available information, PwC information, analysis and estimates
Note: Based on the location of the head office of the banking selling the assets
In progress, €50bn
120
100
80
60
40
20
CRE continues to be the most popular asset
class traded in 2014.
Note: “Specialised” includes certain structured and asset backed products, shipping, infrastructure, energy
and aviation
UK, €9bn UK, €10bn
UK, €24bn
UK, €9bn
Ireland, €15bn
Ireland, €3bn
Ireland, €2bn Ireland, €28.5bn
Spain, €4bn
Spain, €9bn
Spain, €10bn
Spain, €16bn
Portugal, €4bn
Germany, €10bn
Germany, €10bn
Germany, €5.5bn
France, €9bn
Belgium, €12bn
Italy, €4bn
Italy, €5bn
Other, €4bn
Other, €1bn
Other, €1bn Other, €2bn
0
2011 2012 2013 2014 9m
Face value (€bn)
One of the largest transactions that is currently in
progress is Project Aran, RBS’ (Ulster Bank) residential
and CRE portfolio, with a reported face value of up to
€6bn.
€36bn
€46bn
€64bn
CRE, €18bn
CRE, €13bn
CRE, €18bn
CRE, €34.5bn
Secured Retail, €2bn
Secured Retail, €6bn
Secured Retail, €9bn
Secured Retail, €15bn
Unsecured Retail, €9bn Unsecured Retail, €10bn
Unsecured Retail, €15bn
Unsecured Retail, €10bn
SME/Corporate, €1bn SME/Corporate, €3bn
SME/Corporate, €5bn
SME/Corporate, €7bn
Specialised, €6bn
Specialised, €14bn
Specialised, €18bn
Specialised, €0.5bn
0
2011 2012 2013 2014 9m
Face value (€bn)
€36bn
€46bn
€64bn
€117bn
Q3 2014 has witnessed a significant increase
in the value of retail portfolios which have
completed. This has been driven primarily by
the Spanish and Irish markets, in particular,
Spain, which saw the completion of Catalunya
Banc SA’s €6.5bn secured retail portfolio sale
in July 2014.
4

5. 5
2014 deals in key markets
UK
Secured Retail, €1.0bn CRE, €25bn
SME/Corporate, €0.3bn
35
30
25
20
15
10
5
Note: “Specialised” includes certain structured and asset backed products, shipping, infrastructure, energy
and aviation
In progress, €19.5bn
35
30
25
20
15
10
5
The UK portfolio market has taken off in the second
half of 2014, with approximately €13.5bn of
portfolios, almost exclusively CRE and Retail,
coming to market in the UK in Q3 2014. Almost half
of the in progress increase is attributable to Ulster
Bank’s Retail portfolio, which increased in size
during Q3 2014 from €1.7bn to €6bn.
In the previous market update we
predicted that the second half of
2014 would be dominated by CRE
and residential mortgage loan
portfolio transactions in the UK.
This has been the case, with €4.5bn
of residential portfolios and €1.5bn
of CRE portfolios being transacted
in Q3 2014.
Source: Publically available information, PwC information, analysis and estimates
Note: Based on the location of the head office of the banking selling the assets
Ireland
CRE, €5bn
CRE, €6bn
CRE, €5bn
CRE, €4bn
Secured Retail, €0.5bn
Secured Retail, €0.2bn
Secured Retail, €6bn
Secured Retail, €4.5bn
Unsecured Retail, €3bn Unsecured Retail, €1bn
Unsecured Retail, €6bn
SME/Corporate, €0.4bn
SME/Corporate, €2bn
SME/Corporate, €1.5bn
SME/Corporate, €0.2bn
Specialised, €1bn
Specialised, €5.0bn
Specialised, €0.3bn
-
2011 2012 2013 2014 9m
Face value (€bn)
€10bn
€9bn
€23.5bn
€28.5bn
The high UK transactions
volume in 2013 was driven by
loan portfolio sales by Lloyds
Banking Group.
CRE, €12bn
CRE, €1bn
CRE, €2bn
Secured Retail, €0.7bn
Secured Retail, €1.5bn
Unsecured Retail, €1bn
SME/Corporate, €2bn
Specialised, €2.0bn
Specialised, €0.5bn
In progress, €6bn
-
2011 2012 2013 2014 9m
Face value (€bn)
€15bn
€3bn
€2bn
€34.5bn
Ireland has been the most active market in
Europe, predominantly as a result of the IBRC
portfolio sales.

6. 2014 deals in key markets
Spain
The Spanish market continues to be dominated by the sales of retail
portfolios. One of the largest transactions in the 9m 2014 was the
completion of a €7bn residential mortgage portfolio sold by Catalunya
Caixa.
Spain has seen a significant rise so far in 2014
when compared to 2013, driven by unsecured
and secured retail transactions.
Over €10bn of portfolio transactions have
completed in Q3 2014, evidence that Spain is
still a very active portfolio market.
Secured Retail, €0.3bn
18
16
14
12
10
8
6
4
2
Note: “Specialised” includes certain structured and asset backed products, shipping, infrastructure, energy
and aviation
Germany
The large volume of German transactions in
progress is mainly driven by the sale of
WestImmo by EAA.
The largest transaction to complete in 2014
was Commerzbank’s sale of its €4.4bn loan
portfolio in Spain (Project Octopus).
Specialised, €0.5bn
CRE, €5bn
CRE, €9bn
18
16
14
12
10
8
6
4
2
Source: Publically available information, PwC information, analysis and estimates
Note: Based on the location of the head office of the banking selling the assets
CRE, €5.5bn
Secured Retail, €0.2bn
Unsecured Retail, €0.2bn
Specialised, €0.6bn
In progress, €12bn
0
2011 2012 2013 2014 9m
Face value (€bn)
€10bn €10bn
€17.5bn
<€1bn
CRE, €0.2bn
Secured Retail, €3bn
Secured Retail, €2bn
Secured Retail, €7.5bn
Unsecured Retail, €4bn
Unsecured Retail, €6bn
Unsecured Retail, €6bn
Unsecured Retail, €5.5bn
SME/Corporate, €0.2bn
SME/Corporate, €0.7bn
SME/Corporate, €1.5bn
SME/Corporate, €2bn
0
2011 2012 2013 2014 9m
Face value (€bn)
€4bn
€10bn
€16bn
€9.5bn
6

7. 7
2014 deals in key markets
The Netherlands market has seen
growing transaction activity since 2013,
continuing into 2014.
In progress, €3bn
12
10
8
6
4
2
Note: “Specialised” includes certain structured and asset backed products, shipping, infrastructure, energy
and aviation
Italy
We have seen increasing activity of loan portfolio sales
by Italian banks in 2014.
Unicredit has been one of the most active sellers since
2013, accounting for around half of transactions
completed and in progress.
With Italian banks under the spotlight following the
ECB review, we expect the Italian market to remain
very active for the rest of 2014 and 2015.
€4bn
Unsecured Retail, €2bn
Secured Retail, €2bn
€5bn
SME/Corporate, €2bn
Unsecured Retail, €2.5bn
Secured Retail, €0.2bn
In progress, €6bn
SME/Corporate, €0.8bn
Unsecured Retail, €4.5bn
Secured Retail, €0.7bn
12
10
8
6
4
2
0
2011 2012 2013 2014 9m
Face value (€bn)
Source: Publically available information, PwC information, analysis and estimates
Note: Based on the location of the head office of the banking selling the assets
€12bn
<€1bn
CRE, €2bn
Secured Retail, €0.5bn
0
2011 2012 2013 2014 9m
Face value (€bn)
<€1bn <€1bn
€2bn
€3.5bn
Netherlands

8. Contacts
Richard Thompson
+44 (0) 20 7213 1185
richard.c.thompson@uk.pwc.com
Jaime Bergaz
+34 915 684 589
jaime.bergaz@es.pwc.com
Austria
Jens Roennberg
+49 69 9585 2226
jens.roennberg@de.pwc.com
Bernhard Engel
+43 150 188 1160
bernhard.engel@at.pwc.com
CEE
Jonathan Wheatley
+40 212 253 645
jonathan.wheatley@ro.pwc.com
Czech Republic and Slovakia
Petr Smutny
+420 251 151 215
petr.smutny@cz.pwc.com
Denmark
Bent Jørgensen
+45 3945 9259
bent.jorgensen@dk.pwc.com
France
Hervé Demoy
+33 156 577 099
herve.demoy@fr.pwc.com
Finland
Harri Valkonen
+35 840 539 9339
harri.valkonen@fi.pwc.com
Germany
Christopher Sur
+49 699 585 2651
christopher.sur@de.pwc.com
Thomas Veith
+49 699 585 5905
thomas.veith@de.pwc.com
Greece
Emil Yiannopoulos
+30 210 687 4640
emil.yiannopoulos@gr.pwc.com
Hungary
Miklos Fekete
+36 1461 9242
miklos.fekete@hu.pwc.com
Ireland
Aidan Walsh
+353 1792 6255
aidan.walsh@ie.pwc.com
Italy
Antonella Pagano
+39 8064 6337
antonella.pagano@it.pwc.com
The Netherlands
Joris van de Kerkhof
+31 88 792 7622
joris.van.de.kerkhof@nl.pwc.com
Lizelle du Plessis
+31 88 792 5573
lizelle.du.plessis@nl.pwc.com
Norway
Lars Johansson
+47 (0) 4816 1792
lars.x.johansson@no.pwc.com
Poland
Lukasz Bystrzynski
+48 22 523 4228
lukasz.bystrzynski@pl.pwc.com
Portugal
Antonio Rodrigues
+35 12 1359 9181
antonio.rodrigues@pt.pwc.com
Romania
Cornelia Bumbacea
+40 212 253 960
cornelia.bumbacea@ro.pwc.com
Spain
Jaime Bergaz
+34 9156 84589
jaime.bergaz@es.pwc.com
Guillermo Barquin
++34 915 685 773
guillermo.barquin.orbea@es.pwc.com
Pablo Martinez-Pina
+34 9156 84370
pablo.martinez-pina@es.pwc.com
Juan Velayos Lluis
+34 932 532 540
juan.velayos.lluis@es.pwc.com
Richard Garey
+34 915 684 156
richard.garey@es.pwc.com
Antonia Fernandez
+34 915 684 052
antonio.fernandez.garcia_fraile@es.pwc.com
Sweden
Per Storbacka
+46 8555 33132
per.storbacka@se.pwc.com
Turkey
Aykut Tasel
+90 212 355 5838
aykut.tasel@tr.pwc.com
Ukraine
Vladimir Demushkin
+380 444 906 776
vladimir.demushkin@ua.pwc.com
United Kingdom
Richard Thompson
+44 20 7213 1185
richard.c.thompson@uk.pwc.com
Robert Boulding
+44 (0) 20 7804 5236
robert.boulding@uk.pwc.com
Chris Mutch
+44 (0) 20 7804 7876
chris.mutch@uk.pwc.com
Ben May
+44 (0) 20 7212 3664
benjamin.d.may@uk.pwc.com
Chiara Lombardi
+44 (0) 20 7213 8367
chiara.lombardi@uk.pwc.com
North America
Mitchell Roschelle
+1 646 471 8070
mitchell.m.roschelle@us.pwc.com
Jeff Nasser
+1 267 330 1382
jeffrey.nasser@us.pwc.com
Asia Pacific
Ted Osborn
+852 2289 2299
t.osborn@hk.pwc.com
Latin America
Nico Malagamba
nicolas.malagamba@br.pwc.com
Middle East
Duncan Sawyer
+971 430 43454
duncan.sawyer@ae.pwc.com
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