Romania remains the most active market in Non-Performing Loans in the CEE

Deloitte’s “Deleveraging Europe 2015-2016 Survey” highlighted that Romania counts among the most active countries in the region when it comes to the non-performing loans market (“NPLs”), with estimated sales (including transactions ongoing at the end of the year) of 2.5 billion EUR last year.

According to the Survey, a number of transactions initiated in late 2015 remain ongoing and will be a key driver for 2016 market trend.

However, failed deals are not helping the market develop and investors retain a healthy skepticism regarding the likelihood of deals completing. Thus, establishing a servicing platform for secured portfolios is a key concern for many international investors.

In this matter, regional investors are working to build relationships with international investors who lack the experience to operate in the region but have the capital to purchase the larger portfolios which are coming to market

“The active Romanian NPL market environment is also reflected by the development of the legal documentation used in such transactions. While it might be premature to speak at this stage about an actual market standard in terms of portfolio transfer agreements, the lawyers and financial advisors who worked on multiple NPL deals have developed informally a set of best practices”, said Andrei Burz-Pinzaru, Partner in Reff & Associates, law firm member of Deloitte Legal network.

Another conclusion of the Survey is that changes in regulatory policies and additional write-offs relating to the latest round of AQR exercises had led to the narrowing of the pricing gap between buyers and sellers of NPLs.

Deloitte’s Deleveraging Europe 2015-2016 Survey shows that the most active buyers in the CEE region were Deutsche Bank, Kredyt Inkaso, Kruk and APS. Amongst the top active sellers we can note Banca Comerciala Romana (BCR), Unicredit Tiriac Bank (Romania) and Piraeus Bank Romania.

by Mihaela Constantin