Whitestar wins the management of 2 NPL portfolios sold by Montepio

Servicer Whitestar will be in charge of the management of the two non-performing loan (NPL) portfolios recently sold by Montepio Bank, totalling a gross value of €400 million.

As explained by Jornal Económico, Whitestar is a participant in both the joint-ventures that won the two recent tenders for the sale of NPL portfolios launched by the bank led by Carlos Tavares and Dulce Mota.

AXA Investment Managers was the winner of the tender launched for the sale of the “Brick” REO (Real Estate Owned) portfolio, comprising almost 1.000 properties with a gross nominal value of €100 million. Whitestar joined AXA in this operation as its Asset Management Service Provider.

Besides, the society 400 Capital Management, having Arrow/ Whitestar as servicer, won the portfolio “Atlas 2”, which had a gross nominal value of 300 million euros and almost 6.000 contracts, including secured and unsecured credit.

Original Story: Jornal Económico | Maria Teixeira Alves
Photo: Banco Montepio site
Translation & Edition:Prime Yield

BTG Pactual aims to become Brazil’s 6thlargest retail bank

Brazil’s largest independent investment bank Banco BTG Pactual SA aims to become the country’s sixth largest retail bank by client total, new senior partner Amos Genish announce4d.

Genish, Telecom Italia SpA’s former chief executive, will lead a full-service digital retail bank that BTG Pactual launched in the end of May.

The bank’s market capitalization has almost doubled so far this year to nearly R$51 billion.

Genish said high margins and growth prospects in Brazil’s heavily concentrated banking sector have prompted BTG to expand into the digital retail business.

«BTG does not have the legacy of branches that traditional banks have,» he said. «And BTG has a strong balance sheet that fintechs do not have

Genish said he would work to integrate BTG’s four retail units in the coming months: Banco Pan, insurance Too Seguros, loan for mid-sized companies, and its digital investment platform BTG Pactual Digital.

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


There are still €25.8 billion in NPL to be cleansed from Portugal’s top banks     

Even though having sold more than €5.7 billion in non-performing loans (NPL) and other toxic assets over last year, the six largest banks operating in Portugal still have another €25.8 billion to be cleansed from their balance sheets in order to fulfil regulatory demands.

Despite having followed different strategies on reducing its NPL pile stock, Portugal, Spain and Italy are being successful in cleaning up these toxic assets from their financial system, and they seem to be well positioned to continue their NPL reduction, Moodys says.

Notwithstanding the undergoing efforts, Moody’s Senior VP Maria Cabanyes said she hopes that banks keep pursuing their goal of converging with EU average, despite the three above mentioned countries still register high NPL ratios.

In Portugal, the banking sector has been pursuing a strategy that consists of selling their toxic assets. Altogether, in 2018 the country’s six largest banks sold more than €5.7 Bn in NPL and toxic assets, driving a significant decline within the country’s NPL ratio to 11% in the end of the year.

Despite considerable progress, there are still 25.8Bn€ to be cleansed. The banks in Portugal are still urged to tackle their NPL ratio, which stands at 9.4% above the limit imposed by the European Banking Authority.

Original story: ECO |  Eco News 
Photo: Free Gurgel
Edition & Translation:Prime Yield

Alpha and Eurobanc report fall in quarterly profit

Greek lenders Alpha and Eurobank reported a drop in profit in the first quarter of 2019, hurt by lower trading gains and a fall in net interest income.

Alpha Bank, Greece’s fourth largest lender, reported net profit from continuing operations of €27.5 million, down from €65.4 million in the same period a year earlier. It reported a net loss of € 800,000 in the last quarter of 2018.

The lender, 11% owned by the country’s bank rescue fund HFSF, said provisions for non-performing loans (NPL) fell to €178.3 million from €336 million in the same period a year earlier and €669 million the fourth quarter.

Greek banks ae working to reduce their NPL stocks and meet targets on so-called non-performing exposures (NPEs) agreed with European Central Bank regulators.

Alpha’s non-performing loans ratio dropped to 33% of its book from 33.5% at the end of December.

Peer Eurobank, Greece’s third-largest by assets, reported a 43% drop in net profit from continued operations compared to the same period a year earlier, hurt by a fall in net interest income.

Eurobank, which is 2.4% owned by the country’s HFSF bank rescue fund, reported net earnings of €20 million, down from a profit €35 million in the first quarter of 2018.

Credit loss provisions fell 1.5% year-on-year to €165 million. So-called non-performing exposures (NPEs) dropped to 36.7% of its loan book from 37% at the end of December. The company said cleaning up its balance sheet remained its top priority.

According to information from Reuters, Eurobank has received binding offers for a €2-billion securitization of sour residential mortgages and non-binding offers for a multi-asset securitization of about € 7.5 billion.

Original Story: Reuters | George Georgiopoulos 
Photo: Site Alpha Bank
Edition:Prime Yield

Brazilian banks’ results are positive despite worsening economy

Brazilian banks are showing their prowess in making money under any circumstance, with profits jumping even as the country’s economy fails to recover, and unemployment remains stuck in the double digits.

In the beginning of 2019, the country’s four biggest publicly-traded banks – Itau Unibanco Holding SA, Banco Santander Brasil SA, Banco do Brasil SA and Banco Bradesco SA – completed their best quarter since 2015, according to data analysis firm Economatica. Their profits increased 17% yearly between January and March, a period marked by political turbulence, fizzling confidence and plunging growth expectations.

On top of that, they padded profits even as policy makers held the benchmark rate at a record low and forged ahead with efforts to lower banking spreads and boost competition. While the sector’s reputation for making money is already known, its recent success amid such a tough backdrop has caught the eye of central bank officials who wrote in a report that profitability has returned to levels seen before Brazil’s two-year recession.

«Banks will continue with high levels of profitability, and there’s room to grow,» said Tatiana Brandt, a bank equity analyst at Eleven Financial Research. «We haven’t seen spreads fall, and banks are working with that. They are being successful with their portfolio mix and increase in services at a time of greater competition in Brazil

Their financial success shows that banks have become «detached» from a much weaker economy, said Andre Perfeito, chief economist at Necton. Brazil’s economy is expected to grow a mere 1.23% this year, little more than it did in 2018 and 2017. That disparity also raises chances of political pressures, particularly if popular discontent over a feeble recovery increases, he said.

Original Story:Bloomberg | Mário Sérgio Lima 
Photo: / CesarFermino
Edition:Prime Yield



Moonlake Capital has €600 million to buy toxic assets in Spain

Focused to expand its presence in Spain, Moonlake Capital has €600 million to acquire in large portfolios of non-performing loans backed with mortgages in Madrid, Costa del Sol, Balearics, Valencia and Seville, through a new investment vehicle.

With this new vehicle – to be officially launched during next year, that will work as the fund’s servicer by manging and selling the assets included in the portfolio – the company headquartered in Madrid will start to compete with names such Servihabitat, Altamira, Solvia and Haya Real Estate, among others.

Original Story: EJE Prime |:Marta Casado Pla
Photo: Photo by Pablo Rodríguez from FreeImages
Edition & Translation:Prime Yield

Crédito Agrícola earns €43,85 million in the 1stquarter

Portuguese banking group Caixa de Crédito Agrícola ended the first quarter of 2019 with a consolidated net result of € 43.5 million, recording a 18% y-o-y growth.

From these, € 36.6 million were generated by the banking business, while the other € 4.2 million came from the insurance business. The real estate investment vehicles, however, hit the results negatively in € -5.3 million, partly because of the participation units depreciation.

Bank deposits reached €14 billion, 10.2% more (equivalent to € 1,297 million) than in the first quarter of 2018. The gross credit portfolio reached €10 billion, recording a y-o-y growth of 6.2%.  As for the Non-Performing Loans (NPL) ratio there was a downward compared to the 13.7% recorded in the end of March 2018, standing now at 9.8%.

«The group has continued its sound and prudent management, reflected in accumulated credit impairments of € 465 million as March 2019, a figure that assures a NPL coverage ratio of 45.3%», adds Crédito Agrícola, in a statement.

Original Story: Expresso | Maria João Bourbon
Photo: Site Crédito Agrícola
Edition & Translation:Prime Yield

Bradesco’s NPL ratio hit all-time lows in Q1 2019

Brazil’s second largest private lender Banco Bradesco SA posted a 22% gain in quarterly recurring net income, meeting forecasts, as default ratios hit all-time lows.

Bradesco managed to grow its loan book at a fast pace while improving asset quality. It was the latest sign of strength for Brazil’s top banks even as the country’s economy struggles to recover.

CEO Octavio de Lazari said he also sees its Non-Performing Loans (NPL) ratio falling further this year after they declined in the quarter, adding that the bank expects full-year profitability to rise.

«There is still room for improvement in the delinquency ratio, although it is smaller now,» Lazari said. The default ratio over 90 days came in at 3.3%, down 0.2 percentage point from the fourth quarter of 2018.

Analysts highlighted in notes that the main negatives of Bradesco’s results were fee income and operating expenses, as both came in outside the bank’s guidance range.

Bradesco’s first quarter profit rose to 6.238 billion reais ($1.56 billion). Declining losses on bad loans also boosted Bradesco’s results. Loan-loss provision fell by 8.4 % from the same quarter a year earlier.

Itau BBA’s analysts said in a note to clients they were surprised by improvements in Bradesco’s asset quality in the first quarter.

Loan book growth

The bank’s loan book reached 548.3 billion reais, up 3.1% in the quarter, as lending to both individuals and companies increased. Bradesco expects its loan book to grow between 9% and 13% in 2019.

Lazari said the bank’s growth in lending outpaced what it was expected for Brazil’s still sluggish economic recovery, helped by new tools that allow Bradesco to infer clients’ income without requesting a paycheck.

Bradesco’s return on equity, a barometer of profitability, rose to 20.5%, in line with analysts’ expectations. It was up 0.8 percentage points from the previous quarter.

Original Story:Reuters | Carolina Mandl
Photo: Site Bradesco
Edition:Prime Yield


Greek lenders optimistic on road to recovery

The four Greek systemic banks – Piraeus, National Bank of Greece, Alpha Bank and Eurobank — are burdened with €85bn of non-performing exposures, equal to 45% of their loan books and to almost half the country’s forecast gross domestic product for 2019. They have cut non-performing loans (NPLs) by 21% over the past four years through write-offs and sales of packages of soured loans, but are still struggling to meet rising demand for liquidity as the Greek economy recovers.

An unusually high percentage of NPLs at Greek banks compared with other EU member states hit hard by the financial crisis — Spain’s percentage of NPLs is about 6 % — is the result of a long period of inertia by bank boards and regulatory authorities, says Emilios Avgouleas, professor of international banking law and finance at Edinburgh university in the UK.

«This mountain of bad loans is the biggest challenge the banks face. It’s been taking far too long for their balance sheets to be cleaned up, but there’s been sizeable progress recently,» says Nikos Karamouzis, former chairman of Eurobank.

The European Central Bank’s banking watchdog, the Single Supervisory Mechanism (SSM), in March injected a new sense of urgency into the lenders’ effort to reduce their piles of soured loans. Under pressure from the SSM, the banks agreed to slash their bad loan portfolios by more than €60bn by the end of 2021, cutting NPLs to below 20%. The ECB watchdog has kept the banks under scrutiny even though Athens last year finished its third international bailout and has resumed borrowing on the international capital markets.

Two plans to further reduce NPLs could be a catalyst for banks to achieve the ambitious targets set by the SSM. But both still have to be approved by the EU’s competition directorate. One is a new version of the original HSFS plan presented last year. The finance ministry appointed JPMorgan Chase to complete the proposal, which was loosely modelled on the US bank’s rescue of Italy’s Banca Monte dei Paschi di Siena.

The scheme calls for transferring bad loans to a special-purpose vehicle and securitising them using a state guarantee for the senior tranches. An amount of €5bn in state guarantees would suffice to remove €15bn-€17bn from the banks’ balance sheets, says Martin Czurda, chief-executive of the Hellenic Financial Stability Fund (HFSF), the body established by Greece’s bailout creditors that manages the Greek state’s stakes in the banks.

The second plan, devised by the Greek central bank, could wipe as much as €38bn off the NPL pile and would not require additional state funding. The banks would transfer €7bn of deferred tax assets to a special-purpose vehicle, which would then issue bonds and use the proceeds to acquire NPLs held by the banks. Deferred tax assets were granted to the banks to offset losses suffered during a restructuring of Greek government debt in 2012. They comprise some 60 per cent of the capital at the country’s banks. The competition directorate must decide whether the tax credits could be considered as illegal state aid if they were transferred to a separate unit selling bonds.

«We argue that no state aid is involved as the bonds would be sold at market prices,» says Yannis Stournaras, governor of the central bank, adding that investors «responded enthusiastically» to the scheme at roadshows held by the Bank of Greece in London and New York. Rothschild is advising the central bank.

«It’s not an unusual solution — Portugal, Spain and Italy have all used deferred tax assets for securitisations,» says Stournaras. He notes that the scheme, if successful, would reduce the NPL stock by almost 50% and cut the contribution of deferred tax assets to the banks’ regulatory capital to 30% . «At the end of the process, we would have profitable and much healthier banks with fewer provisions that would qualify for investment grade ratings. They would also have unloaded most of the deferred tax assets, which are not the best quality form of capital

If all goes to plan, the finance ministry would launch the first bond issue at the end of 2019, followed a few months later by the central bank. Greek bankers have welcomed both schemes as a useful extra weapon in the battle to reduce their NPL percentages to low single digits in line with the EU average.

«I can see light at the end of the NPL tunnel,» says Christos Megalou, chief executive of Piraeus Bank, the largest Greek lender. «We think both plans are good: they’re complementary and cater to different segments of the market. We’d use them alongside our other NPL-reduction projects

Piraeus reported the sector’s highest percentage of non-performing exposures at 49% of its loan book in December, compared with 48% for Alpha Bank, 41% for National Bank of Greece and 37% for Eurobank. In the meantime, the banks will continue selling and writing off soured loans. All the banks are expected to sell packages of secured corporate loans this year.

Eurobank, the third-largest lender by assets, has made the most progress, thanks to a €780m EU-approved takeover of Grivalia Properties, a Greek real estate fund that gave the bank’s capital base a significant boost.

The merged company plans to securitise about €7bn of bad loans, which would be transferred to a special-purpose vehicle that would issue senior, mezzanine and junior notes. Eurobank hopes to cut NPLs to 15% by the end of 2019 and to single digits by 2021.

Yet the struggle to make the banks investible again is far from over. The SSM will continue to keep a close watch on progress as part of an «enhanced surveillance» programme agreed with the EU after Greece emerged from its third bailout last August.

Original Story: Financial Times |Kerin Hope
Photo: Kolokotronis
Edition:Prime Yield

Spain’s NPL ratio falls to 5.73% and reaches a 9 year minimum

Spain’s Non Performing Loan (NPL) ratio continued to decline in the first quarter of 2019 up to 5,73%; reaching its lowest level since November 2010 says Spain’s Central Bank.

This results from the continued decrease of the NPL stock, which shrank by almost €1 billion, together with the upward trend in credit granting.

According to the latest data released by Spain’s Central Bank, the NPL stock was already bellow the €70 billion barrier since January, and have further declined in March, standing at €68,844 million – €908 million less than in February.

As for the credit granted, it increased to a total of €1,202 million, after reaching the €1,195 million in February.

This 5.73% NPL ratio represents a figure almost 8 percentage points lower than the 13,61% historic peak recorded in December 2013, and a 1,07 percentage points decline from the 6.8% recorded in March 2018.

Original Story: RTVE|EFE
Photo: |Xexo Xeperti
Edition & Translation:Prime Yield


Caixa will offer discounts on delinquent loans to raise up to R$4 billion

Brazilian state-owned bank Caixa Econômica Federal will offer indebted retail clients discounts on their delinquent loans, in an attempt to raise up to 4 billion reais ($990.52 million) for the lender’s coffers, CEO Pedro Guimarães announced.

As explained by the responsible, these loans had already been written off, so if successful this initiative would raise extra revenue. The move will allow Caixa to offer new products and services to clients after they pay off their loans.

According to Reuteurs, the discounts will range between 40% to 90%.

Original Story: Reuters | Marcela Ayres and Carolina Mandl
Photo:Rodrigo de Oliveira
Edition:Prime Yield

  National Bank of Greece launches new NPL reduction program

National Bank of Greece’s (NBG) new program aimed at settling nonperforming housing loans provides for a more aggressive approach to the management of its bad-mortgage portfolio, including debt write-offs.

Bearing the English name “Split & Settle,” the program intends to offer incentives to debtors to pay off part of their dues, and, according to NBG chief executive officer Pavlos Mylonas, is seen leading to 150,000 settlements.

Mylonas explained that the write-offs will not be granted to everyone, and that the selection will be based on the income and property profile of each borrower. They will, however, spearhead the effort to reduce the sum of bad housing loans from €  billion at the end of 2018 to just 1 billion at end-2022.

According to the bank’s management, loan write-offs could be supported by the high level of provisions, which distinguishes National from the competition and allows it to proceed with more aggressive moves on the restructurings front, to the benefit of its clients. Provisions amount to 59% of NBG’s entire loans portfolio and 42% of the mortgage portfolio, and, as Mylonas said, the bank would prefer a solution through write-offs than via the sale of a portfolio to funds, which would inflict greater losses on the lender.

Original Story: Ekathimerini |Evgenia Tzortz 
Photo: Photo by Michalis Famelis / Wikimedia Commons
Edition:Prime Yield

Europe’s financial system remains fragile and fragmented

The European financial system remains fragile and fragmented due to the close relationship between sovereigns and banks, European Central Bank policymaker and Governor of the Bank of Spain Pablo Hernandez de Cos said.

«Investment portfolios are not well diversified and investment opportunities are lost as these may not always be matched with savers’ funds. The financial system remains fragile and fragmented because of the doom-loop between sovereigns and banks,» de Cos said during a conference in London.

The EU still lacks the necessary fiscal tools to cushion against asymmetric or large systemic shocks in the euro are, he said.

De Cos also noted that it was essential for policy makers to strengthen European regulators. «As European markets become more integrated and technologically complex, this is becoming a more essential element that policy-makers need to address,» he said.

Original Story:Reuters | Marc Jones 
Photo: Szymon
Edition:Prime Yield