Global NPL Management Market Research Report 2023-Competitive Analysis, Status and Outlook by Type, Downstream Industry, and Geography, Forecast to 2029

Global NPL Management Market Research Report 2023-Competitive Analysis, Status and Outlook by Type, Downstream Industry, and Geography, Forecast to 2029

NPL is the abbreviation of Non-Performing Loan. NPL refers to a loan in which the borrower defaults and fails to make principal and interest payments within a specified period (usually 90 days). When a business or organization is unable to recoup a non-performing loan, it can repossess assets held as collateral or sell the loan to other investors. Non-performing loan management is carried out through proper due diligence and measured risk management aimed at effectively meeting credit management and collection needs.

Market Overview:

The latest research study on the global NPL Management market finds that the global NPL Management market reached a value of USD 1007.6 million in 2022. It’s expected that the market will achieve USD 1817.4 million by 2028, exhibiting a CAGR of 10.33% during the forecast period.

Rise in non-performing loan ratio and increase in high-value bad debts

The cost of capital for borrowers to repay their loans is increasing as the Federal Reserve raises interest rates and leads to inflation. Higher loan interest rate expenses will reduce the profitability of enterprises and increase debt pressure. At the same time, the government subsidy program that supports banks to provide interest-free and unsecured loans to enterprises hit by the epidemic is expected to be gradually terminated, and some enterprises will face greater pressure on their repayment ability. Some problem loans may be linked to green projects, and the zero-emissions target has driven companies to pursue sustainable initiatives, but the number of potentially eligible projects that could be considered green is limited. Banks have built more buffers against bad debt amid a modest economic recovery and rising borrowing costs. In recent years, banks have placed increasing emphasis on reducing the risk of non-performing loans, resulting in an increased demand for credit management services. The government's implementation of regulatory policies to deal with bad debts has led to an increase in corporate compliance requirements. Limited room for bank credit and tightly controlled corporate bond issuance have also made it difficult for many businesses to finance their production and operations, which could adversely affect banks' asset quality. The non-performing loan business is mainly used for credit collection of large unsecured enterprises, improving the efficiency of debt collection, and has the characteristics of a high degree of specialization. The main purpose of non-performing loan servicing is to relieve the pressure on the financial system from unsecured loans and to ensure that they are managed professionally and by market principles to maximize the recovery rate of such assets. Non-performing loan management is considered a non-core activity for banks and corporations, requiring significant staff and capital resources. Therefore, non-performing loan management service providers play a key role in alleviating this burden. In addition, non-performing loan resolution, management outsourcing, and collection activities enable banks to manage their portfolios efficiently, leading to higher performance. Therefore, rising non-performing loan ratios and high levels of bad debts gradually prompt enterprises to seek help from non-performing loan management service providers, which promotes the development of the industry.

Increased investment in the secondary market

Investors' willingness to sell large amounts of non-performing loans will be an important driver of increased secondary market activity. The pandemic has unleashed a new generation of bad loans. Markets such as Greece and Italy are continuing to dispose of legacy assets, meaning key markets for European banks to dispose of bad debts are relatively subdued as banks make progress on backlogs. The reduction in banks' non-performing loan disposals may increase the importance of the secondary market for non-performing loans. Managing bad loans is a lot of work, involving foreclosure, forbearance, modification, bankruptcy, and possible litigation. As interest rates rise, the supply of non-performing loans increases and the price of non-performing loans is expected to fall, making it possible for investors to make handsome profits. Current buyers of bad loans often buy bad loans at a discount and offer borrowers debt relief (the debt is rescheduled, adopted a new rate, and reduced principal) or enforces its guarantees. Therefore, the investor's internal rate of return is higher. In a positive post-pandemic economic environment, banks that have dealt with bad loans in the past may want to bring them back into the banking system and rebuild potentially lucrative relationships with clients. Likewise, an acquirer may be keen to sell, hoping to realize a return on the original investment. According to Deloitte's 2021 European deleveraging report, while total non-performing loans are on an overall downward trend across Europe, repeated lockdowns and loan levels still under moratorium are such that new non-performing loans will increase, possibly reaching the level of the global financial crisis never-seen-before peak. The market for securitization and sales of non-performing loans will grow in Europe and may become a central target for investors looking to lend. In addition, to further stimulate the secondary market for non-performing loans, the European Banking Authority, the European Central Bank, and the European Commission have been working on non-performing loan trading platforms. The supervision of the secondary market is also gradually strengthened. The European Banking Authority is standardizing the information requirements that sellers of non-performing loans provide to potential buyers, to increase transparency in the secondary market, enabling cross-country comparisons, and reducing information asymmetries between buyers and sellers. All in all, the further development of secondary markets and the application of dedicated solutions such as asset management companies, asset protection schemes, or trading platforms are crucial to effectively address the NPL problem.

Region Overview:

In 2022, the share of the NPL Management market in United States stood at 23.53%.

Company Overview:

The major players operating in the NPL Management market include Deloitte, PwC, KPMG, Ernst & Young, BDO, etc. Among which, Deloitte ranked top in terms of sales and revenue in 2023.

Deloitte is a British multinational professional services network headquartered in London, UK. Deloitte, Ernst & Young, KPMG, and PricewaterhouseCoopers are known as one of the Big Four accounting firms. Deloitte provides audit, advisory, tax, and advisory services to more than 20 industries.

PwC is a global network of firms providing assurance, tax, and advisory services to businesses. We are a network of firms in 152 countries with more than 327,000 employees dedicated to providing high-quality assurance, advisory, and tax services. We help clients solve complex business problems and dramatically improve their ability to create value, manage risk, and improve performance.

Segmentation Overview:

By type, Corporate Assets segment accounted for the largest share of market in 2022.

Application Overview:

By application, the Reorganization segment occupied the biggest share from 2018 to 2022.

Key Companies in the global NPL Management market covered in Chapter 3:

Baker Tilly
KPMG
Alantra
QUALCO
Crowe Horwath
BDO
CliftonLarsonAllen
Ernst & Young
RSM US (McGladrey)
Deloitte
CBIZ/Mayer Hoffman McCann
Grant Thornton
PwC

In Chapter 4 and Chapter 14.2, on the basis of types, the NPL Management market from 2018 to 2029 is primarily split into:

Government Assets
Corporate Assets
Personal Assets

In Chapter 5 and Chapter 14.3, on the basis of Downstream Industry, the NPL Management market from 2018 to 2029 covers:

Bankrupt
Reorganization

Geographically, the detailed analysis of consumption, revenue, market share and growth rate, historic and forecast (2018-2029) of the following regions are covered in Chapter 8 to Chapter 14:

North America (United States, Canada)
Europe (Germany, UK, France, Italy, Spain, Russia, Netherlands, Turkey, Switzerland, Sweden)
Asia Pacific (China, Japan, South Korea, Australia, India, Indonesia, Philippines, Malaysia)
Latin America (Brazil, Mexico, Argentina)
Middle East & Africa (Saudi Arabia, UAE, Egypt, South Africa)