Market overview
Primary market
approx. €370 billion (2024)
Secondary market
approx. €600 billion (2024)
Largest markets
France, Italy, Germany, Spain
Market drivers
New rules
The European NPL market has grown significantly in recent years, driven by both regulatory requirements and increased transparency, which have made transactions more efficient. At the same time, technological innovation and the emergence of more specialised players have further professionalised the market. This development is important because a well-functioning NPL market strengthens financial stability and helps banks free up capital for new lending. Effective NPL management also helps borrowers find sustainable solutions to their debts more quickly.
Three types of buyers of NPL portfolios
Financial investors
Private equity funds, hedge funds and credit funds often purchase NPL portfolios with a view to reselling them. Contact with borrowers is usually handled by a specialist credit management company (CMS).
CMS firms
Specialised CMS firms deal exclusively with the management of non-performing loans. They can manage both their own portfolios and portfolios owned by lenders or investors who outsource the management.
Regulated banks and financial institutions
From 2025, regulated and financially sound institutions may qualify as SDRs. This requires: specialisation in NPL management, a clear organisational and governance model and adequate capital and liquidity levels.
Financial investors
Private equity funds, hedge funds and credit funds often purchase NPL portfolios with a view to reselling them. Contact with borrowers is usually handled by a specialist credit management company (CMS).
CMS firms
Specialised CMS firms deal exclusively with the management of non-performing loans. They can manage both their own portfolios and portfolios owned by lenders or investors who outsource the management.
Regulated banks and financial institutions
From 2025, regulated and financially sound institutions may qualify as SDRs. This requires: specialisation in NPL management, a clear organisational and governance model and adequate capital and liquidity levels.