Portuguese banks have accelerated the pace in cleaning up Non-Performing Loans (NPLs) from their balance sheet in the 4th quarter 2017, when this indicator recorded the highest quarterly decrease ever. For total 2017, NPLs were reduced by € 9,3 billion.

“The stock of NPLs continued to decline in the fourth quarter of 2017. This decrease, of € 2,9 billion, is the largest quarterly reduction since the beginning of the publication of the European Banking Authority (EBA) series (in December 2015)”, notes the Statistical Bulletin of Banco de Portugal (Portugal Central Bank).

“The NPL’ stock reduced by € 9,3 billion compared to December 2016 and by €13,5 billion regarding the highest volume recorded in June 2016”, adds the document. Although the positive input from all sectors, the Portuguese Central Banks highlight the companies segment performance, recording a € 5,9 billion-decrease compared to December 2016.

“Thus, the NPLs ratio decreased 1.3 percentage points (p.p.) in the quarter, to 13.3%, which represents a 3.9 p.p. reduction with respect to the end of 2016 and of 4.6 p.p. compared to June 2016. As for the non-financial private sector, NPls ratio decreased 0.6 p.p. compared to September 2017”.

While the NPLs ratio falls, the coverage ratio for NPLs is increasing. “By December 2017, the coverage ratio of NPL for liabilities was 49.3%, increasing 2.8 p.p. compared to the previous quarter”. “The evolution was dued to an increase of 3.4 p.p. of the coverage ratio within the non-financial companies segment, states the Central Bank.

Original Story: ECO (Paulo Moutinho)
Photograph: Depositphotos
Translation and Edition: Prime Yield

The market of mergers & acquisitions (M&A) lost momentum in Portugal during the 1st quarter of 2018, with y-o-y decreases of 19.1% and 43.3% in the number of transactions and in the negotiated amount, respectively.

According to the latest report from Transactional Track Record, released on April 4th, 3,1 billion euros were transacted in the M&A market during the first quarter of the year, reflecting a 43.3% y-o-y drop. There was also an 19.1% y-o-y downward in the number of transactions, which totalled 72 in Q1 2018 (89 in Q1 2017).

As the upward trend in real estate continued, the sector was the most active within this period with 15 transactions recorded, but, nevertheless, also representing an y-o-y 32% drop. Technology and internet were the areas that grew the most (133%), totalling 12 operations.

In the period under analysis, 31 inbound deals were recorded. Spain continued to be most active foreign buyer in number of deals, closing 10 operations for a total amount of € 156 million – 4 of which in the real estate sector, including the € 86 million investment from ORES Socimi into the acquisition of six retail assets in Portugal. France was also among the most active foreign buyers, with 7 transactions and investments amounting € 305 million, followed by Netherlands, with 2 deals that sum up € 450 million.

Looking into the total amount invested within the first three months, the top is headed by China with more than € 1.5 billion employed in the acquisition of Portuguese companies. «The deal of the quarter named by Transactional Track Record was the acquisition of Forum Montijo, Forum Sintra and Sintra Retail Park shopping centres by Immochan, in € 450 million investment», states the report.

Original Story: Jornal de Negócios
Photograph: Forum Montijo
Translation and Edition: Prime Yield