Arrow Global to Boost Bad Loan Purchases by 20% a Year, CEO SaysSally Bakewell
Arrow Global Group Plc, the U.K. buyer of delinquent loans, said it plans to increase investments by 20 percent a year as European banks offload non-performing assets to meet new capital regulations.
It already purchased 99 million pounds ($164 million) of bad loans in the first half of this year, mainly from Portugal, Tom Drury, chief executive officer of the Manchester-based company, said in a telephone interview. Non-performing loans held by European banks rose to more than 750 billion euros ($988 billion) at the end of 2013, according to Bloomberg Intelligence.
“There are big political benefits of a healthy debt purchase market in helping banks get back to lending and stimulating the economy,” said Drury. “We’re confident of good supply driven by the regulatory changes.”
Lenders from the U.K. to Spain are deleveraging as the European Central Bank reviews the quality of their assets before taking over as the region’s banking supervisor in November. Banks will also undergo stress tests designed to evaluate their ability to withstand a financial shock.
Arrow, which buys defaulted customer accounts from lenders including credit card companies, businesses and retail banks, may consider buying more student loans from the U.K., said Drury. The company, along with U.S. private-equity firm CarVal Investors LLC, acquired 890 million pounds of outstanding student debt for 160 million pounds in November, according to a U.K. government statement at the time.