Banks across Europe are finding it increasingly difficult to offload unsold loans from 2007 in the wake of the credit crisis. In total, there is a £60 billion backlog of loans that are yet to be sold, though banks are likely to announce job cuts in the syndicate banking sector in the coming months as it becomes harder to sell the loans to investors .
Given the problems caused by the sub-prime crisis in the US, investors are understandably cautious of taking on bank’s riskier leveraged loans, and are demanding greater discounts in order to purchase the loans.
Last year saw leveraged lending of £183 billion in Europe, the Middle East and Africa, though £124 billion of that was lent in the first half of the year – a record high. The fact that just £59 billion was lent in the second half owes to the effects of the sub-prime crisis.
Banks Across Europe Struggle to Clear Loans Backlog
Banks Across Europe Struggle to Clear Loans Backlog
Fri, 18 Jan 2008
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