Few bankers expect more prudence after recovery
LONDON (Reuters) - One-fifth of European bankers surveyed see no long-term issues that will outlive the property market recovery, while just a sixth believe banks will become more prudent in the aftermath, a report showed on Monday.
More than a third of those surveyed said there had been no change in their risk assessment procedures "as these were already well established", while some felt the lack of change was because there had been no new lending, BNP Paribas Real Estate said.
The property services firm, a unit of French banking group BNP Paribas (BNPP.PA), interviewed 30 senior executives including from the Royal Bank of Scotland (RBS.L), Allied Irish Bank (ALBK.I), and Hypo Real Estate HRXG.DE.
It said three quarters of the banks surveyed are not yet calling in loans that have breached their loan-to-value ratios, but are seeking other solutions such as restructuring, continued investment or equity injection.
"Even though people are talking about the economy getting better, the banks are still expecting further capital declines and tenant defaults," Joe Pitt, head of recovery and restructuring at BNP Paribas Real Estate said.
"As the economy turns, failure of occupiers and ongoing pressure on rents will put additional pressure on borrowers," Pitt said, noting he believes some lenders will start getting tougher with borrowers.
(Reporting by Daryl Loo; Editing by Andrew Macdonald)
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