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  "documentTitle": "Deleveraging Europe",
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  "notes": "Part of a 'Deleveraging Europe' report series.",
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      "text": "In 2020, the volume of NPLs traded in the Spanish market totalled about €9.9bn, considerably below the €16.2bn divested in 2019, €51.2bn divested in 2018, and the €53.1bn in 2017.",
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      "text": "NPL transaction volume: €9.9bn",
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      "text": "Market dynamics in 2020 were strongly affected by macroeconomic concerns surrounding the COVID-19 crisis. The large number of processes that stalled during 2020 were a direct effect of this general uncertainty, with both sellers and buyers adopting a 'wait and see' approach. That said, some transactions, launched prior to the pandemic, were completed successfully. A more positive sign was the swift initiation of transactions shortly after emerging from lockdown, which gained traction among the investor community. These transactions opened the doors to additional disposals across a variety of asset classes in Q4 2020, proving that market competition is alive and well, and that banks can continue to carry out NPA sales as part of their long-term divestment strategy. In 2020, the volume of NPLs traded in the Spanish market totalled about €9.9bn, considerably below the €16.2bn divested in 2019, €51.2bn divested in 2018, and the €53.1bn in 2017, when the market was enlarged by jumbo deals. Since 2018, the Spanish market has moved towards mid-size transactions and 2019 is a good example of this new trend. The general uncertainty created by the pandemic limited the number of transactions that closed in 2020. The Spanish market is still one of the largest and most active markets in Europe, even as the portfolio size has shifted towards mid-size deals from the jumbo deals that occurred in 2017 and 2018. A further trend that emerged during 2019 and 2020 has been the rise of secured SME portfolio transactions, replacing the developer portfolios that predominated in the previous years. Banks will also continue to explore alternatives to efficiently manage re-performing loans, which are capital intensive, as well as bring fresh vintages of consumer loans to market. This asset class accounted for almost a third of the total volume of portfolios traded in 2019 and 2020. Portfolio transaction activity is likely to rise in the near term driven by high Spanish NPL volume that totalled €75.4bn at the end of 2020, with continued loan sales expected by large banks that have significant NPL stocks. Large private equity funds that purchased portfolios between 2014 and 2016 are also likely to come to market with securitisations of portfolios that have reached their five-year exit timelines. A potential new wave of NPLs is slowly but surely emerging, particularly as forbearance policies come to an end.",
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