Caixa to dispose 6,000 recovered properties in only two lots

Caixa Econômica Federal has opened the period for the presentation of proposals to the acquisition of two lots comprising loan-recovery properties, but that still have unsolved issues to address– the so–called BNDUs, or assets not for own use. The properties are gathered in only two lots, of about 3,000 properties each, accounting for apartments, townhouses, commercial business rooms and warehouses. The bidding process will be restricted and lots comprise both properties subject to or without legal action. Investors specializing in distressed assets had been paying close attention to this opportunity since February, when Caixa gave the first signs to the market on a possible sale. However, changes in the Bank’s board of directors and presidency have delayed this process. Proposals should be submitted by July 27th and will be opened on August 2nd.

Original Story: Estadão/Economia (Coluna do Broadcast)
Photograph: Caixa (divulgação)
Translation and Edition: Prime Yield

Itaú’s recovery acquires over R$ 4 bn in NPLs from Bradesco

Recovery, Itaú Unibanco’s credit recovery company, acquired over R$ 4 billion (bn) in Non-Performing Loans (NPLs) portfolios – the so called bad debt – from Bradesco. This is the second time that the company acquires operations from the financial institution, underlining its independence, which was questioned after the company changed hands from BTG Pactual to Itaú. The operation, whose winner was selected last 9thJune, is to be completed during the current month (June), allowing Bradesco to account it in its balance sheet on the 2nd quarter. However, being overdue loans with an average two to ten-year term, this won’t ben producing effects in the Banks results.

Since Bradesco started to dispose bad debt – a strategy that was not an option for this institution previously to the country’s recent crisis and before purchasing HSBC –, the bank has already disposed about R$ 20 billion in NPLs. In the 1st half of 2018, alone, more than R$ 9 billion were transacted. As the bank seems to prefer this strategy and, unlike its competitors, still does not consider to have its own credit recovery company, the market is now expecting Bradesco to put on sale a similar NPL volume over the second half of the year, boosting the transaction of NPLs portfolios in Brazil. The bank is, however, reserving information about the volume to come into the market. Bradesco and Recovery prefer not to comment on this information.

Original Story: Estadão/Economia (Coluna do Broadcast)
Photograph: Itaú
Translation and Edition: Prime Yield

Brazil: number of consumers listed in default exceeds 63 million, says SPC

The number of Brazilian consumers listed in credit default reached 63,29 million in May, reflecting a 2.78% year-on-year increase. Data by the Serviço de Proteção ao Crédito-SPC Brasil (credit protection services) and Confederação Nacional de Dirigentes Lojistas-CNDL (a retailer association) says that the Southeast region was the one recording the sharpest increase in consumers listed as defaulters in Brazil – a status that creates restrictions for buying on credit -, reflecting a growth of 8.07% in May. In the other regions, growth has been lower, with 2.95% in Northeast, 2.27% in Center-West, 1.55% in North and 1.08% in South.

Northern region has the highest rate of defaulters – 48% of adult population living in this region, or 5,8 million defaulters. Northeast region follows, with 17,45 millions of credit defaulters or 43% of adult population; Center-West, recording a 4,94 million listed defaulters (42% of population), Southeast, having 26,94 million defaulters (41% of population) and South, 8,15 million defaulters (36%).

Of total national 63,29 million defaulters, 17,9 million are aged 30-39 years.

Original Story: Agência Brasil
Photograph: Depositphotos
Translation and Edition: Prime Yield

Citi and Itaú to dispose NPLs of companies

Itaú Unibanco and Citi have placed up for sale portfolios of non-performing loans of companies, boosting the Brazilian NPL transaction markey over the 2nd quarter. With a market traditionally concentrating in NPLs in the household segment, the disposal of corporate portfolios is seen as an evolution, thus attracting specially international specialized funds, the so–called “vulture capital”. As for Itaú, the bank has launched into the market for sale about 40 companies undergoing judicial reorganization.

The institution has already received offers from two interested parties and expects to close the operation by July. No big case of corporate reorganization is included in this lot.

Citi, which has been focusing only on the corporate segment in Brazil after selling its retail operation to Itaú, is putting into the market some R$70 million in medium-sized company’s loans. This process is now at an initial stage. Citi and Itáu have both not commented on this information.

Original Story: Estadão/Economia (Coluna do Broadcast)
Photograph: Shutterstock
Translation and Edition: Prime Yield

Portuguese banks “cleaned” one-fifth of bad debts in 2017

The Portuguese Banks have eliminated about one-fifth of bad debts from their balance sheets during 2017, reducing total Non-Performing Loans (NPLs) to €37 billion (bn), stated Banco de Portugal (the Portuguese Central Bank) in its latest Financial Stability Report (FSR), released earlier this month. According to the institution, it is a “very significant” reduction of this burden that penalizes the profitability of banks and is one of the most – if not the most – important risks to the stability of the financial system. Therefore, Banco de Portugal stresses that efforts for reduction must continue, taking advantage of the more favourable conditions generated by lower interest rates and booming foreign investment in Portugal.

Besides releasing the value of the NPL stock in Portugal – €37 bn as for the end of 2017 – Banco de Portugal also explains how the €9,3 bn reduction has been done. One of the main reasons was the volume of loan writte-offs (meaning, the use of capital to recognize losses), mainly possible due to the capital reinforcement in banks such as Caixa Geral de Depósitos, Millennium bcp or Montepio. Also strongly impacting was the sale of NPLs portfolios to other investors. In addition, national banks also managed to recover some values previously assumed as risk loans, but that were recovered – that being the case mainly in household segment.

Reflecting these effects, Portuguese banks have reduced NPL ratio to 13.3%, a level significantly lower than the 17.2% recorded by the end of 2016. “It’s essential that Portuguese banks continue to follow the plans for reducing NPLs that were submitted to the regulatory authorities. This will put them in a more favourable position when accessing the international financial markets”, highlights Banco de Portugal in this document.

Original Story: Observador (Edgar Caetano)
Photograph: Tiago Petinga/LUSA
Translation and Edition: Prime Yield

Bain Capital in the race for CGD’s NPLs

Bain Capital and other three funds are the leading candidates for acquiring two NPLs portfolios from Caixa Geral de Depósitos (CGD), according to economic newspaper Jornal Económico. The sale of this type of portfolios, which total about €1 billion, is a part of the public bank’s efforts to “clean” bad debt from its balance sheet. As ECO previously revealed, CGD is planning to sell two NPLs portfolios this year, aiming to continue reducing the “burden” that is still affecting the bank’s profitability. This information was revealed to investors and analysts during the bank’s conference call for the announcement of its 1st quarter results. According to the bank headed by Paulo Macedo, the sale processes are now in a very advanced stage, although no value was advanced for the disposals. José Brito, Member of the Board at CGD, stated that the two sales are not to be close at the same time.

Original Story: ECO
Photograph: CGD
Translation and Edition: Prime Yield

Apollo is negotiating the acquisition of 277 properties to Fidelidade

Apollo Global Management is currently negotiating with insurance company Fidelidade a portfolio of 277 properties that the company placed up for sale. The asset manager has been selected to preferential negotiation in the process, after the analyses of three proposals that made it to the final stage of the negotiation process. The other two competitors were Oaktree Capital and Orion Capital.

A source of Fidelidade has only confirmed to newspaper Jornal Económico that an entity has been selected for preferential negotiation, but stated that “confidentiality issues made it impossible to identify the selected entities”.

The interested parts had until 17th November to make a preliminary assessment and submit their non-binding purchase bids. After this phase of the process, three competitors were chosen for the preferential negotiation.

Original Story: Jornal Económico (Ricardo Santos Ferreira e Maria Teixeira Alves)
Translation and Edition: Prime Yield