Capitalising on the bank asset sale

As the banking sector deleverages, the loan portfolios put up for sale could be attractive to insurance companies. But the structure of these assets and the potential regulatory treatment can make these assets a difficult fit, and the prices banks have been seeking have been too high for many insurers. Thomas Whittaker reports

Europe’s banks are under pressure. Economic and regulatory stresses are forcing them to consider the sale of many of the loan assets on their balance sheets. For insurers this de-leveraging process could provide opportunities to either purchase some of these assets or step into the gap left by the banking industry and begin originating loans themselves. 

The level of bank deleveraging is potentially massive. The International Monetary Fund recently predicted that banks will look to trim their