Greece’s lenders want home protection criteria shift

Greece’s creditors are insisting on a drastic reduction of the maximum property and income criteria for the protection of borrowers’ homes, or the exemption of corporate debts, before approving the Greek plan, sources have told Kathimerini.

The lenders are asking that the ceiling on bank deposits a debtor may have to be eligible for primary residence protection be dropped to €5,000, from the limit of €65,000 that the original draft agreement provided for. Similarly they want to see the property value limit reduced to €100,000 from the original €260,000.

The creditors’ demands were the main reason for the disagreement at Monday’s Eurogroup that led to the postponement of the disbursement of almost €1 billion to Athens, and to Finance Minister Euclid Tskalotos asking for more time so that the decisions can be made at the government level.

The objective of the creditors is to see the number of borrowers that qualify for the new protection system shrink further, as they consider the figure of 180,000 debtors that would be protected under Athens’s proposal and bank estimates to be particularly high. In the creditors’ view, the government will not only protect the financially weak but also some strategic defaulters, thereby strengthening the culture against repayment.

In Brussels and Frankfurt they believe you cannot have someone with € 30,000 in the bank – let alone €65,000 euros – claiming to be unable to pay a monthly tranche of €200 or €300 to spare his or her primary residence from foreclosure. That is why they are seeking a drop in the limit of bank deposits to €5,000, while the government has only consented to halving the limit of the original proposal – i.e. bringing it down to around € 32,500.

Original Story:Ekathimerini-com | Evgenia Tzorti
Photo: FreeImages.Com/Pierre Amerlynck
Edition:Prime Yield


Notaries report 2.6% January rise in Spanish property prices

Sales figures were stagnant across Spain for the third month in row, latest data from the countries’ notaries show. These report y-o-y increases of just 0.3% in the number of houses sold and of 6.1% in mortgage activity in January 2009.

These figures seem to show some signals of slowing down in the level of activity in Spain’s real estate market, after a long period of significant growth. In November, the notaries confirmed a year-on-year drop in sales figures for the first time in 2018, albeit a very slight one (the decrease has been revised to just 0.2%), and in December the upward movement was a mere 3%, whereas as recently as last summer double-digit increases were still the norm.

During the first month of 2019, according to the notaries’ provisional figures, were recorded 40,388 sales and purchases following a general upward trend which began in early 2013, and the average price paid for units of housing rose by 2.6% to 1,424 €/sqm.

Meanwhile, the number of mortgages constituted on housing purchases during January was 19,390, 6.1% more than in the same month in 2018, and the average loan capital was up by 0.9% at €135,616. Both this figure and the average market price of property have risen in each of the last nine months.

These data show that 48% of all purchases were financed by mortgage loans in January – the figure still has not reached 50% since 2010 – and that in these cases the mortgages accounted for an average of 74.7% of the sale price, close to the lowest proportion in the last 12 years.


Original Story: Murcia Today | News

Photo: 57

Edition:Prime Yield


New housing loans hit the lowest level from the last 11 months

In January 2019 the Portuguese banks grant €747 million in housing loans, hitting the lowest value since February 2018, data from the Bank of Portugal show.

According to the statistics now released by Portugal’s central bank, this figure is €156 million lower than the €903 million in housing loans made available in December.

After three consecutive months of growth in the housing loans granting, this upward trend seems to reverse within the start of the new year, however, it should be noted that the month of January is a period traditionally marked by a slowdown in lending.

Original Story: ECO News Milev
Edition:Prime Yield

NPL: EU approves new rules for standard minimum coverage

The European Parliament has adopted, on Thursday, new EU rules for standard minimum coverage of bad loans.

Measures to mitigate the risk of possible, future, non-performing loans (NPLs) accumulating due to the recessions brought about by the 2008 financial crisis were approved by the Parliament, with 426 votes to 151 and 22 abstentions.

In an official statement, the EU explains these measures «will help strengthen the Banking Union, preserve financial stability as well as banks’ profitability and encourage lending, which create jobs and growth across Europe».

NPLs are loans that are either more than 90 days overdue or are unlikely to be fully repaid. To complement the existing rules relating to own-funds, Parliament voted to introduce common minimum loss coverage levels.

So, adds the same source, «each bank will have to set an amount of money aside, to cover losses caused by future loans that could become non-performing. Coverage requirements for banks will, however, vary, depending on whether NPLs are secured by eligible credit protection i.e. collateral or unsecured. The kind of collateral being used, such as real estate, will be also taken into account».

The new rules, which have already been informally agreed with Council, will only apply to NPLs taken out after the entry into force of the Regulation.

Original Story:European Sting | European Union
Photo: Cuypers
Edition:Prime Yield

IMF warns Greece for risks in the credit system

The International Monetary Fund (IMF) discerns risks in Greece’s credit system, according to the post-bailout surveillance report discussed at March 6thExecutive Board meeting, according to Kathimerini.

This is an issue that the Fund has consistently referred to as it considers it of prime significance for the Greek economy. This time sources say the IMF does not directly raise the issue of recapitalization, as it has done in the past, but identifies serious dangers due to the high volume of nonperforming loans.

The Fund is also unhappy with the proposals for the reduction of nonperforming loans and the protection of borrowers’ primary residences that the government is discussing with the European institutions.

Original Story:  Ekathimerini Eirini Chrysolora
Photo: IMF
Edition:Prime Yield

Cerberus wants to take €350 million with Gescobro sale

Cerberus Capital Management has just put the sales signal over Gescobro, its credit recovery company in Spain. According to several sources listened by La Información, the North-American fund is completing the five-year disposal programme established when it acquired the credit recovery society from the Spanish fund Miura, back in 2014.

The same media added that Ceberus aim is to obtain around €350 million with the deal, although the final price will depend on how the sales process will go on. Alantra is advising Cerberus on the sales process, which is expected to last until the end of first semester, at least. The non-bidding offers phase is now open.

The sales value is based on the significant portfolio of bad credit acquired by the company over the last few years from the main Spanish financial entities, and whose gross asset value totals more than €8.6 billion. More precisely, Gescobro owns 12 unsecured credit portfolios with a gross book value of €8.3 billion and other two secured credit portfolio with a gross nominal value around €300 million.

Estimated recovery procedures pending amount to almost €600 million over the next 15 years.

Besides, Gescobro has “servicing” agreements with the majority of the main Spanish banks, being responsible to manage and recovery their non performing credits. In total, these business area means other €3.5 billion third party owned under management. Among these last ones, there is the recently acquired «Mauser Project».

Established in 1980, Gescobro is specialist in non-secured credit from SMEs.

Original Story: La información | Pepe Bravo
Photo: Cerberus online
Edition:Prime Yield

Recovery in Greece’s housing sector gains momentum

The recovery om Greece’s housing market gained momentum over the last quarter of 2018, with prices rising 2.5% year-on-year, as shown by the latest data released by the Greek central bank.

Greek housing prices had declined by 42% since 2008’s peak data showed, suggesting that a recovering economy and growing interest might lift property prices further.

Apartment prices rose 2.5% in the fourth quarter compared with the same period in 2017, Bank of Greece data showed, with the recovery accelerating from a downwardly revised 2.1% increase in the third quarter of last year.

More specifically, prices rose by 4.2% year-on-year in Athens, where home-sharing platforms like Airbnb and a “golden visa” programme (a renewable five-year resident’s permit in return for a €250,000 investment in real estate) have grown very popular.            

Prices had slid 1.0% in 2017 from a year earlier, taking the cumulative fall since 2008, when the country’s protracted recession began, to 42%.

«It (new data) is a further confirmation of the uptrend in market prices, with Athens starring after an increase of 4.2%», National Bank economist Nikos Magginas told Reuters.

«It’s the result of rising demand and a shrinking stock of available-for-sale residential real estate», he added.

A projected rise in real disposable income of about 2% this year, coupled with improving economic sentiment and nascent signs of a pick-up in demand for mortgage credit, should further boost real estate prices in 2019, Magginas said.

Property accounts for a large chunk of household wealth in Greece, which has one of the highest home ownership rates in Europe at 80%, versus a European Union average of 70%, according to the European Mortgage Federation.

Original Story: Reuters | George Georgipoulos
Photo: Järvet
Edition:Prime Yield

Property prices: buyer-seller expectation gaps widen to 22%

The average price of property rocketed by 15.4% in the space of a year in Portugal. But while real estate continues to result in relatively decent profits for sellers, new data also indicates that their expectations of the property’s worth and its actual selling price have widened further this past year.

Expectations in Portugal are usually that a potential buyer of property will offer less than the price listed by the seller.

A decade ago, prior to the economic crisis, the so-called buyer-seller expectation gap stood at around 10%. But since the onset of the well-documented property market boom, sellers appear to have even greater unrealistic prospects of their property’s actual value. In Lisbon, this differential between buyers and sellers has now climbed to 22%, while in Porto, this figure has risen to as high as 30%.

These figures were calculated by real estate market analysts Confidencial Imobiliário (CI), throughout comparing declared values once property deeds are signed against values contained on the Residential Information System, showing listing prices.

Other figures published a few days earlier showed that average property prices in Portugal ballooned by 15.4% in the space of 12 months leading up to December 2018.

Accumulated increases since late 2013, now stand at 46% CI said, yet sellers now appear to have an even greater distorted perception of the market values of their property.

However, this is far from meaning that we are seeing the end of rising property prices in Portugal, only at a more sedate rate. A view that is further substantiated by the recent Portuguese Housing Market Survey, from CI, which found that prices are set to start levelling out, though maintaining an upward curve.

Meanwhile, rental properties have also continued to record price increases, and rose by 37% in 2018 when compared with the previous year. The average rent in Portugal currently stands at €1,106/month.  The five districts with the highest average rental prices in 2018 are Lisbon, Porto, Faro, Beja and Setúbal.

Original Story:The Portugal News | Brendan de Beer
Photo: Humberto Plácido da Silva
Edition:Prime Yield

Caixa Económica Federal aims to raise R$3.9 billion through subsidiary listings

State-owned Brazilian bank Caixa Economica Federal is hoping to raise R$15 billion through the listing of four of its subsidiaries, chief executive Pedro Guimaraes told newspaper O Globo in an interview published on Saturday.

The bank aims to list its insurance, asset management, lottery and credit card subsidiaries in the second half of 2019 or first half of 2020, Guimaraes said. In January, he had said they could be listed within 12 months.

The company had previously disclosed that it plans to sell minority stakes in the subsidiaries through listings in Sao Paulo and New York.

Original Story:CNBC | Reuters
Photo: Caixa Econômica Federal
Edition:Prime Yield


Spain’s housing market shows signs of cooling in loans

Spain’s vibrant property market just showed another small signal of slowing in the end of 2018, as the new loans in houses recorded the lowest pace in four years, Reuters reported.

While the number of new mortgages on houses reached a seven-year high in 2018, the annual growth slowed, according to latest data released by the Spanish National Statistics Institute. The €42.7 billion lent represented a double-digit jump from 2017, yet the increase eased from the previous year’s.

The number of new house mortgages rose 10.3% last year, INE said. That’s down from growth of 10.7% in 2017, 14.6% in 2016 and 20.8% in 2015.

As an investment, homes have been beating many major alternatives. Prices rose an annual 7.2% in the third quarter, the most recent periodavailable. That compares with a drop of 9.6% in the benchmark IBEX 35 index in the same 12 months, and a 0.1% gain in a one-year to 10-year Spanish government bonds index.

Activity varied widely across the country, with regions like Valencia and Madrid showing more than 14% mortgage volume growth, to increases as low as 5.2% in Galicia and 2.4% in Aragon.

Surging purchase prices and rents in big cities in the past few years nevertheless are provoking the Socialist government to plan urgent legislation to cap apartment rents. Prime Minister Pedro Sanchez is negotiating a mechanism that could allow regions to limit rental increases, El Pais newspaper reported.

Sanchez would need parliament to ratify the decree. He faces possibly being driven from power in April general elections, according to opinion polls.

Original Story: Bloomberg | Todd White and Macarena Muñoz Montijano
Photo: K
Edition:Prime Yield


Intrum plans to reinforce investment in Greece’s NPL market

«A step toward the right direction to reduce the moral hazard in the country,» is how Intrum Justitia Group Chief Executive Mikael Ericson describes the agreement between the Greek government and the country’s banks concerning the amendment of the so-called Katseli law for the protection of debtors.

In an interview with Kathimerini, the head of one of the largest European nonperforming loan servicing companies says that the group’s plan in Greece is to be independent and to benefit both the lenders and borrowers, as the former will be getting paid for products and services they have sold, and the latter will recieve assistance to improve the state of their finances.

The responsible also revealed Intrum’s plans to reinforce its presence within the Greek market, after having acquired two large NPL portfolios. «We are considering a variety of options and more recently we have applied for a debt servicing license with the Bank of Greece», he said. Besides, «we are also looking at other alternatives, one potentially being to buy a licensed debt servicing platform, another to do a carve-out from a local bank, or even to build a platform of our own».

Original Story: Ekathimerini | Evgenia Tzortzi
Photo: Intrum
Edition:Prime Yield

Startups in February up 23.9% as insolvencies went down 1%

The number of new companies formed in Portugal in February was up 23.9% on the same month a year earlier, at 4,668, while the number or insolvencies was down 1% at 494, according to a study by business information service Iberinform.

According to the research from the subsidiary of Crédito y Caución, a company specialising in credit insurance for the domestic and export markets, there were five fewer insolvencies in February than a year earlier, and 899 more new companies.

In the first two months of 2019 taken together, the number of new companies created was up 25.1% at 11,330.

The cumulative total for insolvencies was up 3.5% on the same period a year earlier, at 1,007, although this total was lower than the same period in both 2016 and 2017.

Original Story:The Portugal News Online | Lusa 
Photo: FreeImages_Matthew Bowden
Edition:Prime Yield

Rental prices outpaced inflation for second consecutive month

Residential rental prices in Brazil continued to show positive movement in January rising 0.41%. After December’s rise of 0.38%, this was the second consecutive month rental prices outpaced the month’s inflation rate, which in January was 0.32%, as calculated by the IPCA/IBGE (National Consumer Price Index/Brazilian Institute of Geography and Statistics).

The latest rental figures were published in the FipeZap Rental Index, which tracks real estate rental listings across Brazil’s twenty-five largest cities.

Seventeen of the twenty-five cities in the survey registered increases in January with Brasília (2.15%), São José do Rio Preto (1.48%), São José (1.28%), and Joinville (0.96%) showing the biggest increases.

Notably, Rio de Janeiro showed a nominal increase in rental prices in January of 0.30% but still fell just short of the month’s inflation rate.

Meanwhile, rental prices in São Paulo registered an increase greater than inflation of 0.73%.

Of the eight cities in the survey that showed declines in January, the biggest declines were seen in Salvador and Fortaleza, where residential rental prices in the two cities declined 0.96% and 0.51% respectively.

Looking at the last twelve-month period, average rental prices in Brazil overall have increased 2.39%, but was still short of the period’s inflation rate of 3.72%.

São Bernardo de Campo had the biggest increase in that period, up 9.92%, with the city of Joinville in Santa Catarina not too far behind, up 9.48%.

Over the twelve-month period, Rio de Janeiro rental prices decreased 3.09%, while São Paulo prices increased 4.03%.

January’s survey also showed the average price per square meter of the twenty-five cities. São Paulo city held the distinction of having Brazil’s most expensive residential rental prices in January with an average price of R$37.02/sqm.

Barueri, also in São Paulo state, was a distant second with rental prices hovering at R$31.96/sqm. Rio de Janeiro rounded out the top three in January at R$30.21/sqm.

Within the city of São Paulo, the upscale neighborhood of Vila Olímpia, which is home to the Brazilian offices of several multinational companies including Google, Yahoo!, and Microsoft, had the most expensive rental prices in the entire country with listings averaging R$75.99/sqm.

Meanwhile in Rio, Leblon and Ipanema had the highest rental prices in the city at R$54.83/sqm and R$51.75/sqm respectively.

The FipeZap Index monitors real estate sale prices across fifteen Brazilian cities and is a monthly gauge of property prices. It is prepared jointly by the university research center, Fipe (Economic Research Institute Foundation) and the Brazilian online real estate platform, Zap Properties.

Original Story:The Rio Times | Nelson Bele
Photo: Eduardo Livino
Edition:Prime Yield


BES’ bankruptcy already cost over €5billion to Portugal and is still counting

Since 2014, following the Portuguese government decision to shut down the broke Banco Espírito Santo and thus creating a new bank (Novo Banco) to protect its clients, this process has already cost over €5 billion to public purse. And that amount is still on the rise, due to the bank’s recapitalization needs.

Over the last five years, Portugal’s Government have already injected €6.9 billion from the public money, although €3.9 billion came from a loan provided through the Resolution Fund.

After several efforts to sell the bank, in 2016 the US investment fund Lone Star acquired 75% of Novo Banco (with the Resolution Fund keeping 25%). However, the deal was that new owner would invest €1 billion in the bank’s capitalization instead of paying any price for it.

Under this agreement, was created a compensation mechanism for eight years and up to €3.8 billion from the Resolution Fund to fund for any loses caused by former toxic assets. Later, in 2017 the bank received €792 million from the Resolution Fund, of which €430 million from a public loan. And, in the end of February 2019 the bank requested another €1.149 billion.

At the end of the day, Portuguese coffers have lost €4.692 billion in capitalising Novo Banco, a sum which can rise to €5.841 billion if the new request is accepted.

But Portugal’s Finance Minister Mário Centeno has already said Novo Banco will get «not one euro» extra of public money, because the Resolution Fund loan will be paid in 30 years. «This recapitalisation will be made, once again, through a public loan but that does not mean the state is giving money to the bank», he explained to TV chanel RTP3.

Original Story: Eco News |Lusa 
Photo: Novo Banco
Edition:Prime Yield

  Bain Capital raises €1.25 billion fund to purchase European Bank Loans

Bain Capital’s credit arm raised 1.25 billion euros for a new fund to purchase European bank loans, according to information given to Bloomberg by a person familiar with the matter.

Bain Capital Credit’s new Special Situations Europe fund will target banks’ secured debt, non-performing loan portfolios and real estate assets, said the person, who asked not to be named because the information isn’t public. The money raised for the fund, the first dedicated to European soured loans at Bain, exceeded an initial target of €1 billion, the person said.

Bloomberg contacted an external spokeswoman for Bain, who declined to comment on the matter.

Last year alone, Bain acquired nine bank loan portfolios across Europe, in Greece, Italy, Portugal and Spain, with a gross book value of more than €4 billion, revealed the same source. Bain Capital has $105 billion in asset under management, according to its website.

European lenders’ efforts to clean up their balance sheets since the global financial crisis have created a burgeoning market for trading non-performing loan exposures.

While more than a third below their peak, Italian lenders still had €222 euros of NPL on their books as of June, according to PricewaterhouseCoopers data. Greek lenders are also seeking to slash €89 billion of bad debt from their books, equivalent to about half of the country’s annual economic output.

Original Story:Bloomberg | Luca Casiraghi
Photo:  Bain Capital
Edition:Prime Yield

Growing number of hedge funds are moving into shipping debt

There is a growing number of hedge funds moving into shipping debt, an asset class few have invested in before, looking to buy up loans and bonds as banks cut their exposure to the troubled sector, Reuters says.

World economy worries and cost pressures are dampening prospects for a proper recovery in many segments of the shipping sector that, as Reuters highlighted, has struggled with tough markets for a decade.

Meanwhile, European banks, particularly German lenders, are trying to offload distressed and performing loans to the industry which attracts high capital requirements.

And the European Central Bank’s banking supervisor has flagged troubled non-performing loans (NPL) in 2019 as «a concern for a significant number of euro area institutions».

Hedge funds clocked up hundreds of millions of dollars in losses from investments in mainly equities when the shipping industry first turned sour a decade ago – and have made limited forays for the most part since.

Last year some equity-focused funds bet on a recovery for the global shipping industry through the stock and futures markets, but many are now retrenching after heavy losses in the fourth quarter.

Debt-focused funds are hoping for more luck.

Hedge funds looking at distressed loans include York Capital Management and Cross Ocean Partners, the sources consulted by Reuters said.

One deal expected to generate hedge fund interest include a portfolio of distressed shipping loans that Greece’s Piraeus Bank is seeking to sell, finance sources said.

A source close to the Piraeus Bank deal said Reuters the portfolio of shipping loans, called Nemo, was made up of non-performing and performing loans with a nominal value of 500 million to 600 million euros. The source said a sale was expected to close in the second quarter of 2019, declining to provide any details on potential bidders.

Original Story: Reuters | Jonathan Saul, Maya Keidan
Photo: S
Edition:Prime Yield

NPL secondary market gain momentum in Portugal, says EU

Although its nonperforming loan (NPL) ratio remains high, over the last few months there has been a considerable reduction in Portugal’s bad debt stockpile «as the secondary market gains momentum», says the European Union (EU) on its «Country Report Portugal 2019».

«Portugal continues to correct its macroeconomic imbalances. Although all main indicators are moving in the right direction, public and private sector debt and foreign debt are still significantly above the benchmarks set», says the report, adding that «This continues to have a negative impact on the country’s external position, where the pace of adjustment is expected to slow down».

According to this document, Portugal has made some progress in increasing the quality of its financial system, namely by increasing the efficiency of insolvency and recovery proceedings, reducing impediments to the secondary market for the resale of nonperforming loans, and improving access to finance for businesses.

«While the ratio of non-performing loans remains high, there has been a considerable reduction as the secondary market gains momentum», says the same document, adding that «Portuguese banks have steadily decreased their stocks of non-performing loans and non-performing loan ratios in line with guidance from the Single Supervisory Mechanism» and that «lenders either work out bad debts internally, jointly through a servicing platform or increasingly put them up for sale on the secondary market».

So, adds the EU, «as the Portuguese property market is experiencing a strong period of growth, the secondary market for non-performing loans (often backed by real estate) is becoming increasingly competitive, with many foreign players actively looking to purchase nonperforming assets».

In 2017, the total value of NPL secondary market transactions reached about €2.3 billion, but given the strong pipeline of new deals, «this figure is set to be surpassed in 2018», forecasts the EU.

Highlighting that «the decline in nonperforming loans (or ‘bad’ loans) along with the improved profitability is reducing the balance of risks in the banking sector», the documents also notes that the «aggregate NPL fell by roughly one third over the last two years», thanks mainly to the NPL disposal programmes.

Story: Prime Yield Caetano

Novo Banco plans to sell even more NPL in 2019

Portugal’s Novo Banco will maintain the efforts towards the reduction of its nonperforming loans (NPL) stockpile along this year, preparing to launch soon the bidding process for another two bad debt portfolios: the projects “Nata 2” and “Viriato 2”.

«Yes, our aim is to close more NPL sales this year», said Novo Banco President, António Ramalho, during the bank’s annual results presentation.

These portfolios arrive into the market a pair of months after the sales completion of projects “Nata” and “Viriato”, which took place in the end of 2018. The larger NPL portfolio to be sold in Portugal ever, Project Nata was divided into two tranches: one with a gross book value of €500 million and other, larger, of €1.2 billion. Besides this, in the same period, the Portuguese bank have also sold its Project Viriato, involving more than 9,000 real estate owned (REO) assets.

Considering the «success» of these «toxic assets» sales, António Ramalho announced that «Yes, we will have the Nata 2 and the Viriato 2», ensuring that this will be another year for the bad debt shrinking.

«We have to do a very clear and precise NPL plan and deliver it to ECB. Its part of our programme», explained the president of the bank which was bought by US’s Lone Star in 2017 after former Banco Espírito Santo collapse in 2014. The goal, stresses António Ramalho, is that «the bank’s NPL ratio reach 5%», in line with ECB’s targets. As for the «bad bank» in which remains the burden legacy of Banco Espírito Santo, the NPL ratio should stand «close to 12%».

As revealed in the same occasion, Novo Bank recorded losses of €1.412 billion in 2018.

Original Story:Jornal de Negócios | Rita Atalaia
Photo:  Novo Banco
Translation and Edition: Prime Yield

Mortgage concession boosts up to €10 billion in 2018

The mortgage concession boosted in Portugal along 2018, reaching almost €10 billion and hitting an eight-year high, informed Banco de Portugal (the Portuguese Central Bank).

According to the entity led by Carlos Costa, in December the national banks granted €903 million for mortgage loans, alone. This is the highest value registered over the past five months, with the total volume of mortgages granted in 2018 rising to €9.835 billion.

The figure represents a new high since 2010, the year before the Portuguese bailout, confirming an upward trend on mortgage concession over the last few months, reflecting an annual growth 19% in 2018 vis-à-vis 2017.

Original Story: Eco | Eco News 
Photo: Saavedra
Edition:Prime Yield

Brazil’s BTG Pactual management business grows 30%

Brazil’s Banco BTG Pactual SA expects its assets under management to grow roughly 30% in 2019, says Reuters after an interview with the banks Chief Financial Officer, João Dantas.

Net inflows to its wealth and asset management businesses were 26 billion reais ($6.94 billion) in 2018. Total assets under management reached 327 billion reais in December.

The bank forecast follows new hirings for its asset management unit earlier this month, such as former Finance Minister Eduardo Guardia to be chief executive and a veteran BlackRock Inc portfolio manager to be head of equity funds.

Asset management firms in Brazil have benefited from the country’s gradual recovery and all-time low interest rates, which tend to push investors into investments with higher fees and out of plain vanilla government bond funds.

BTG reported a 4.4% decrease in fourth-quarter recurring profit to 711 million reais on February 25th, as expenses went up and offset higher revenues.

The bank’s total revenues rose 13% from the year-ago quarter to 1.549 billion reais, mainly driven by higher fees from asset and wealth management.

Dantas also foresaw the bank’s loan book will expand 30% in 2019, with disbursements to companies in Brazil, Colombia and Chile. Last year, it rose 32.9%, reaching 38 billion reais.

«We already see a higher demand for corporate loans and we have capital to support loan book growth,» the CFO said.

The Sao-Paulo based bank reported an annualized return on equity, a measure of profitability, of 15%, up 0.7 percentage points from the previous quarter.

Original Story: Reuters |Carolina Mandl 
Photo: BTG Pactual
Edition:Prime Yield