He added that PwC already knew of over 150 different investor groups taking a "close interest" in the European NPL market, including major U.S. funds, sovereign wealth funds and far eastern investors.
"We are seeing extremely high levels of competition in the market at the moment… As the banks try to position themselves to meet the Basel III capital requirements and react to the ECB's stress tests following the Asset Quality Review, we expect more assets to come to market in 2014 and beyond," Thompson said.
(Read more: ECB's Draghi: New bank stress tests 'just the beginning')
PwC's rival EY (Ernst & Young) noted in its annual NPL investor report that European distressed debt opportunities were increasingly tempting investors away from the U.S.
"European banks have increasingly begun to reduce their exposure to NPLs via portfolio sales. Consequently, global NPL investors are turning their attention to Europe, and for good reason. An estimated 1 trillion euros of NPLs are sitting on the balance sheets of the region's banks, far surpassing the magnitude of distress in the U.S.," said EY partners Howard Roth and Christopher Seyarth in the report.
Roth and Seyarth said investors viewed the U.K., Ireland, Germany and Spain as the markets with the most prospects.
"By far, Europe represents the biggest opportunity worldwide," said Lee Millstein, head of European and Asian distressed and real estate investments at Cerberus Capital Management, quoted in EY's report.
—By CNBC's Katy Barnato