Volumes in retail credit markets in Europe will grow at 1.4% over the next five years, less than the annual growth in nominal GDP of around 2%, consultancy Oliver Wyman andthe European Fund and Asset Management Association (Efama) forecast.
In a joint report, European retail credit survey: Exploring the map, they say the general slowing of retail credit growth hides significant discrepancies across Europe. And, overall, growth will slow even in growing markets.
Poland, Turkey, Russia, Norway and Sweden are seen as “growing” markets, a category defined by economic growth and non-performing loans.
Whereas Austria, the UK, Denmark, Finland, Germany and Switzerland are seen as “stagnant” markets.
On the “watch credit” list of countries that have suffered most during the financial crisis are Ireland, Greece, Portugal, Italy, Spain, Hungary, the Czech Republic, Belgium, France and the Netherlands.
“Institutions in those markets need to prepare for a tougher environment,” Matthew Sebag-Montefiore, partner, Oliver Wyman. “To avoid making the same mistakes as the watch-list countries, these institutions should invest in retail credit analytics covering underwriting, portfolio management and collections.”
Patrick Desmarès, secretary general of Efma, says although the outlook remains “relatively bleak”, banks should better position themselves to deal with upcoming market developments.
©2013 funds europe