View more on these topics

Non-performing loans tipped to be fresh source of deal liquidity

PricewaterhouseCoopers is predicting that the trading of non-performing loans between financial institutions will replace securitisation as the way many lenders secure liquidity.

In a report on consumer credit, the accountancy firm suggests that the combination of falling house prices, rising unemployment and the shift in consumer attitude to debt will increase demand for credit while supply shrinks.

As a result lenders will look for new ways to free up their balance sheets by selling assets that would have been disposed of via securitisations in previous years.

PwC suggests that the non-performing loans market could become the channel of choice.

The report states: “With the demise of the securitisation market and doubts over whether it will ever bounce back, we believe that a new market trend whereby non-performing loan portfolios are exchanged between different financial institutions is likely to emerge over the next three years.

“When one considers that much of the credit crisis stems from banks packaging consumer credit assets into complex structured vehicles and selling them to third parties, it is interesting to note that the fallout from this practice is evolving into a new market.”

It adds: “Financial institutions can still buy and sell similar assets, albeit non-performing ones, but for different reasons.”

Mortgage industry consultant Bob Sturges says he is not surprised by the findings because such loans are less risky and therefore more appealing than securitised assets.

He says: “Portfolio trades are nothing new but they are attractive because they are an efficient way of releasing liquidity and are more transparent than securitised loan books.

“Also, it’s a buyer’s market right now and anecdotal evidence sugg-ests that non-performing loans are going for a song.”


Charlbury Group expands nationwide field force

Arrears management expert The Charlbury Group is expanding its nationwide team of field agents as market conditions help to bolster business. The group operates a nationwide field force which conducts a variety of tasks for firms across the mortgage market. It says current market conditions are resulting in the need for greater information on properties […]

Steve Haggerty quits as MD of Skipton

Steve Haggerty has unexpectedly quit as managing director of Skipton.The society says it has reluctantly accepted his resignation and will make further announcements regarding his replacement. A statement from the society says: “We are disappointed to see him go but wish him all the best for the future.”Haggerty was appointed managing director of Skipton on […]

Attractive Mortgage Rates

A few things have happened today which are of note, not least Abbey and C&G launching some attractive looking rates.


News and expert analysis straight to your inbox

Sign up