Complacency is misplaced as German debt distress will soar

Although Germany currently has a low level of non performing loans (NPL) which are at a historically low NPL debt ratio of 1.83%, it is not the time for banks to grow complacent said Arcida Advisors managing partner Oliver Platt.

In an interview with Real Asset Media he pointed out that the German Association of Loan Purchase and Servicing estimated that NPLs will grow to €35.5 billion in 2023, increasing to €38.1 billion in 2024.

In addition to the NPLs being handled by banks, more distressed debt is likely to emanate from the alternative debt providers. Platt said that at the end of February numbers in German publication Immobilien Zeitung indicated a range between €12 billion and €16 billion of distressed debt from alternative debt providers. “So we have a total volume to be expected in 2024 of about €55 billion of something,” Platt added.

Please click on the video above to watch the full interview or listen to the podcast below.