Do NPL portfolio sales help reduce banks' financing costs?

摘要

We examine financing cost implications of non-performing loan (NPL) divestitures in the European banking industry. Based on a uniquely large transaction database covering 180 NPL sales, we analyze whether selling banks are able to reduce their financing costs measured by CDS spread changes. We do not find a significant tightening of CDS spreads around NPL divestitures, indicating that European banks are not able to reduce their financing costs by NPL portfolio sales. (C) 2019 Elsevier B.V. All rights reserved.