Europe’s banks are likely to sell a record €100 billion of loans this year that are no longer part of their main businesses, according to consultants PwC, chipping away at a pile of €1.9 trillion of unwanted assets.

European banks last year sold €91 billion of so-called ‘non-core’ loans, and that number is likely to rise by another 10 per cent this year, PwC said in a report released yesterday.

The consultancy predicted it would take at least another five years for Europe’s banks to get rid of their problem assets, meaning the clean-up will have taken more than a decade since the 2007/09 financial crisis.

The €1.9 trillion of unwanted loans equates to about 4 per cent of the industry’s assets.

Around half are non-performing loans and the other half are performing loans that banks do not consider part of their core businesses after changing strategy.

Banks are shrinking balance sheets that were bloated before the financial crisis. Most of the deleveraging comes from loans running off, but banks are also selling loan portfolios to speed up the process.

Bad loans are a particular problem in Italy, where banks hold about €186 billion of non-performing loans.

Italy is considering a state-backed company to help banks offload the loans so they start lending again, but has had to put the plan on hold, sources told Reuters last week.

Italian banks sold €8 billion of loan portfolios last year, and that should rise to more than €15 billion this year, PwC estimated.

Most of last year’s loan sales were from banks in Britain, Ireland, Spain and Germany.