Will payment problems with mortgages, car and other loans increase? Where are things going better?
Risk managers in European credit institutions believe that payment defaults on mortgages, car and other loans will increase. However, Germany, Austria and Switzerland (DACH) are exceptions. The situation there is expected to remain stable.
However, a survey conducted by the European Financial Marketing Association (Efma) and FICO also revealed that the propensity to save is greatest in these countries. 89 percent of risk managers in DACH believe that customers are generally skeptical about loans. However, they do not fear the effects of a downturn. On the one hand, lending is tailored to the financial possibilities of customers. The prerequisite for this is automated IT solutions such as afb CMS, which also integrate external systems such as Schufa. Secondly, the credit policy was adapted in 2008 so that it now serves as a crisis buffer. 89 percent of Germans, Austrians and Swiss stated that risk management had become more important to them in the last three years. At European level, the figure is 83 percent, and 77 percent have already optimized their risk management processes.
Improving balance sheets by selling loans
Banks are currently trying to sell loans. They want to reduce the size of their balance sheets and thus meet the new capital requirements. There could be more options for this today than the risk managers surveyed assumed. "Due to the crisis, we see a market potential of 250 billion euros for non-performing loans in Germany. That's around 20 percent more than last year," says Nora von Obstfelder, Senior Manager at Ernst & Young. However, it is not only non-performing problem portfolios that are up for grabs, but also healthy loans, a still underdeveloped segment that could dominate the market in the future.
Banks are increasingly looking to divest business areas that are not or no longer part of their core competence. For example, many banks are currently concentrating on their home countries again when it comes to real estate financing. According to Ernst & Young, the market potential for healthy loans in Germany is 500 billion euros. There are enough interested investors, the market is simply waiting for the first "icebreaker transactions". Other countries, such as the UK, are already further advanced in this respect. However, loan sales require several months' lead time due to their complexity. So deals are not expected to be concluded until the second half of the year at the earliest.
