"On the back of the Asset Quality Review in 2014 a select number of Dutch banks have recently disposed of parts of their loan portfolios. Increased activity is expected given the appetite of investors, particularly in residential and (non-performing) CRE loans." – Erik Rood, Partner, Corporate Finance, KPMG in the Netherlands
Many of the loan sales which have successfully closed in the Netherlands this past year have been CRE-backed portfolios. This has been driven by several larger transactions, notably via FGH, Van Lanschot and Propertize.
Larger loan portfolios are coming to market as Dutch banks consider decreasing their exposure to the domestic residential mortgages and in seeking faster RWA reduction.
In 2014, the total NPL volume for the Netherlands was €88.6 billion, however, the Netherlands is still ahead of most of the Eurozone countries in terms of NPL ratio, owing to a very low percentage of loss incurred on mortgages and other loans by the Dutch banks.
An increasing number of CRE-backed loan portfolios is expected to come to market in the coming year, as the Netherlands has become a “hotspot” for CRE loan portfolios, given the scale of pre-crisis lending that remains on domestic bank balance sheets. However, the underlying Dutch CRE market is currently illiquid and the country continues to have an oversupply of large office space. Smaller office spaces, retail and residential-backed loan portfolios are also expected to trade, though in smaller volumes. The ultimate exit for investors following the Propertize transaction is not yet fully understood.
The most anticipated sale process of the year will soon be in full swing – Project Swan, which is the sale of Propertize, the €5.5 billion Dutch bad bank formed in 2013 post the nationalisation of SNS Reaal. Many international investors are interested in acquiring the platform and the accompanying loan book, which will give them a strong position in the Dutch servicing market.