The market for non-performing loans (NPLs) and distressed loan portfolios is once again gaining significant momentum. This development was the focus of the secondary credit market event hosted by the LOANCOS Group in collaboration with Debitos GmbH on May 12, 2026, in Frankfurt am Main. Participants included bankers and experts from the banking sector.
A key takeaway from the event: The NPL market is on the rise—though not in the form of a sudden surge as seen in previous crises. Rather, a gradual increase is emerging, particularly in the commercial lending sector. The focus is on real estate financing—especially office real estate—but also on fiber-optic financing, software and IT companies, energy-intensive industries, and certain small and micro-enterprises.
However, the current market situation is not comparable to that of the 2007–2008 financial crisis. This is because banks today are in a more robust regulatory position, are better capitalized, and have established risk management structures in place. Nevertheless, the pressure to act is mounting: higher Stage 2 ratios, refinancing problems, increased financing costs, and the regulatory requirements imposed by the NPL backstop are forcing many institutions to address at-risk exposures at an early stage.
“Banks are increasingly faced with the question of whether they want to retain and manage their loan portfolios themselves, whether they can outsource certain tasks, or whether a sale is the better solution. It is crucial that these alternatives be evaluated at an early stage. We support lenders and investors in valuing portfolios, making them ready for exit, and implementing viable solutions,” says Dr. Clifford Tjiok, Chief Commercial Officer and member of the Management Board of the LOANCOS Group.
“The commercial sector, in particular, is facing challenges: Many loans from the years before the interest rate turnaround are now due for refinancing under significantly changed conditions. At the same time, distressed assets often lose value not only due to market fluctuations, but also because decision-making processes are too slow. A robust data foundation and clear decision-making parameters are key competitive advantages in this situation,” explains Thomas Spulak, Executive Director of Proceed Portfolio Services GmbH, a company within the LOANCOS Group.
For LOANCOS, one thing is clear: the secondary credit market will continue to grow in importance in the coming months. Banks and other lenders must analyze at-risk exposures at an early stage, evaluate options for action, and establish appropriate structures for servicing, workout, or sale.
