Montepio Bank looks forward to selling its stake in Brazil’s Monteiro Aranha group

Montepio Bank is keen to sell its stake in the Brazilian group Monteiro Aranha. According to ECO, at stake is a block of about 1.2 million shares valued at €40 million, which were inherited by the Portuguese bank following the collapse of the Espírito Santo Group in 2014.

The stake in the Monteiro Aranha Group, a century-old holding company with investments in Klabin (Pulp and Paper), Ultra (LPG and Oil Derivatives) and real estate, had been given by GES as collateral for a €50 million loan to Rioforte, according to information gathered by ECO. Rioforte was the industrial arm of GES, which went bankrupt six years ago.

In September, the Brazilian press had reported that a block of shares valued at R$ 200 million (about €40 million) was on the market, reporting rumours that it was Montepio Bank that was selling its position in the Brazilian group.

Montepio Bank is one of the biggest shareholders of Monteiro Aranha. Bradesco Seguros holds 12.75% of that holding company, while the remaining capital is in the hands of individual shareholders of several families that control the holding company.

Original Story: Eco News | News 
Photo: Banco Montepio site
Edition: Prime Yield

Credit contracted in Greek banks fall 1.4% in January

Total credit in Greece’s banking system contracted 1.4% year-on-year in January after a

1.3% decline in the previous month, according to the latest data released by the Bank of Greece.

The most sharpen fall was on the public sector segment: -5.9% year-on-year, while in the credit to business and households the contraction was -0.6% compared to the year before.

Original Story: Reuters | Angeliki Koutant
Photo: Photo by Jonte Ramos in
Edition: Prime Yield


Brazil inflation rises more than expected in February

Brazilian consumer price inflation, as measured by the IPCA index, rose 0.25% in February, government statistics agency IBGE said, more than the 0.15% economists in a Reuters poll had expected.

Prices rose 4.01% in the 12 months through February, also more than the median forecast of 3.90%. 

Original Story: Reuters | Jamie McGeever
Photo: Photo by BrunoNeves in
Edition: Prime Yield

Novo Banco requested a further capital injection of €1.037 bn

Novo Banco requested a capital injection of €1.037bn in the beggining of March, much of which will be sourced from the Portuguese state. 

In the last week of February, Portuguese lender Novo Banco reported its 2019 year-end results, where it showed €1.067bn of losses, a 25% improvement on the previous year. That was the good news.

The bad news was that the bank said it would request €1.037bn from the Portuguese resolution fund (FdR), the country’s public body that supports resolution measures applied by the Bank of Portugal.

However, this was not the first time Novo Banco has asked for the resolution fund to help. The new request, if granted, would bring Novo’s total capital injections from the FdR to €2.978bn since 2017.

The reasons for the injections have their origins in the sale of a 75% stake in the bank to US private equity fund Loan Star in 2017.

Novo Banco was created in 2014, comprising the good bits of Banco Espírito Santo, which entered into resolution that year. The Portuguese state owned it all until Lone Star arrived, keeping 25% after the sale was completed.

A clause in the sale contained a contingent capitalisation agreement (CCA). The CCA would be triggered if certain ratios for the bank fell under particular thresholds, or if the bank registered losses across specified assets, forcing the FdR to inject capital to replenish the bank’s capital ratios. The agreement also stipulated a ceiling of €3.89bn of injections from the FdR.

Original Story: Global Capital |David Freitas 
Photo: Novo Banco site
Edition: Prime Yield

Piraeus Bank launches the process for its first NPL securitization

Greece’s  Piraeus Bank is launching the process for its first nonperforming loan (NPL) portfolio securitization, opening the virtual data rooms to candidate investors in the Phoenix package within March.

Phoenix contains mortgage loans adding up to €2 billion and according to the bank’s plan this will be the first securitization to enter the state’s Hercules asset protection scheme in the context of a broader securitizations program adding up to €7 billion.

The non-binding offers for the Phoenix portfolio are expected next month. Based on the plan, the senior notes to be issued in the context of the securitization – for which the lender will demand state guarantees via Hercules –  will come to €900 million. Besides the senior section of the bonds to be issued, which Piraeus will keep on its books, it will also hold onto 5% of the junior notes, offering 95% to candidate buyers.

Piraeus has already commissioned the assessment of the portfolio to an independent firm (DBRS Morningstar), while the start of procedures for the securitization of a second package of NPL, under the name Vega, will be run in parallel. This will include mortgage and corporate loans adding up to €5 billion.

The plan that was announced by the bank’s chief executive officer, Christos Megalou, foresees that the bad loans pile will be reduced from €24 billion in end-2019 to €13 billion in end-2020 and below €8 billion by the end of 2022.

As for its NPL ratio will drop from 49% in end-2019 to 29% in December 2020 and 8% in end-2022.

In absolute figures the two securitizations will cost Piraeus just over €1 billion. In order to avert the increase in the state’s holding, which currently amounts to 26% of Piraeus’ share capital, the lender will follow the model of the separation of banking activity and the creation of a holding company.

The latter will be listed on the stock market and incorporate 100% of the banks’ shares, as well as the mezzanine and the junior notes.

Based on the business plan, the rest of the losses will be covered by the profits to be released from the reduction of provisions and the increase in operating profits.

Original Story: Ekathimerini |Evgenia Tzortzi
Photo: Piraeus Bank site
Edition: Prime Yield

Blackstone and Cerberus record losses with residential acquired from Banks

Blackstone and Cerberus are losing money from the residential portfolios acquired from Santander and BBVA, which have generated millionaire losses to the funds. On the contrary, Lonestar, however, is obtaining benefits of €6.4 million from the assets it bought from Caixa Bank.

Quasar Investments, the society established by Blackstone, acquired dwellings, land and non-performing loans from Santander for a net value of €10 billion, in a deal that generated red numbers of €714 million in the last year’s accounts. Santander still co-owns 49% from the company and had recorded losses of €350 million.

The losses shared by Cerberus and BBVA stood around €48 million, even though it wasn’t as pronounced for the entity, since it only holds 20% from Divarian, the jointly created company.

Original Story: EJE Prime | NEWS
Photo: Site Cerberus
Edition & Translation: Prime Yield

Brazil Central Bank to step into markets again markets again to support real

Brazil’s central bank announced it will sell dollars in the spot market for a second day to support the real amid a rout in global assets.

After sold about $3.5 billion in two auctions on March 10th, the first such intervention this year, Policy makers decided to offer up to $2 billion in a spot auction on the next day. 

The central bank had been stepping into the foreign exchange markets only via swap auctions, of which it sold $9.5 billion in February in a bid to contain the volatility.

The change comes as the collapse in global markets triggered by a selloff in crude added pressure to the real, which was already the world’s worst currency. The real is down 15% this year as record low rates diminish its carry appeal and as disappointing economic data casts doubt on Brazil’s recovery.

On the morning of March 9th, the central bank pledged to continue intervening in the foreign exchange market with all instruments available and for as long as needed. The bank’s Monetary Policy Director Bruno Serra refrained from announcing a program to systematically sell dollars from Brazil’s foreign reserves, but said this doesn’t mean the central bank is stepping out of the market any time soon.

Original Story: Bloomberg |Luisa Leite 
Photo: Site Banco Central do Brasil
Edition: Prime Yield

Iberian Property markets are stronger than before

With the market stronger than before, the current Iberian real estate cycle will be long term, says the Chief Economist at Spanish investment bank Arcano, Ignacio de la Torre. The reason? Because both countries are not relying on foreign loans.

The responsible was the keynote speaker of the panel «Why Portuguese and Spanish Real Estate Markets will keep rising» at an event organised by the Portuguese Association of Real Estate Investors and Developers (APPII). Dismissing fears of another looming recession or property bubble in the Iberian Peninsula, during its intervention, Ignacio de la Torre explained that both Portugal and Spain are now in a stronger, more balanced situation financially concerning their housing markets than many other countries worldwide.

Arcano’s Chief Economist says that when looking at both housing markeys, many people focus on the returns and how much property goes up. But, too often they forget about the associated risks with returns. 

«If you compare both markets before the crisis, house prices were rising sharply but didn’t factor in the risks. Both countries’ systems were servicing huge current account deficits and relied on a lot of debt versus GDP. When you rely on debt over GDP, sooner or later you will create a big problem», he explained.

Looking at both markets today, they are growing in line with available income. In Portugal, wages are growing at around 3% while in Spain at 2.2%, with employment growth at 1% in Portugal and 2% in Spain.

«Risks are critical. Both Portugal and Spain, for the first time in 40 years, are enjoying an equilibrium in their current account balances. We are not building houses relying on German loans. If you analyse how much the total debt-to-GDP growth ratio is, nominally speaking (families + corporations), we have healthy growth (above 1% is dangerous; both were at 3% by 2006). Today both Portugal and Spain have an intensity below 0% which is very healthy,» says the economist.

De la Torre stresses that people and investors are now looking to finance their investments from savings rather than relying on foreign funding. Looking at the private sector in both Spain and Portugal, both corporations and families are saving. The total amount of leverage is coming down, which is healthy.

Original Story: Portugal Resident | Chris Graeme
Photo: Photo by Alfonso Romero in
 Edition: Prime Yield

Four suitors interested in Piraeus’ loans to MIG

At least four groups appear to be interested in the acquisition of Piraeus Bank’s loans to Marfin Investment Group (MIG), which add up to almost €550 million.

Sources say that the already known suitors Emma Capital and Comer Group have been joined by a foreign private investment fund, as well as another vehicle belonging to the United Arab Emirates’ state investment fund.

Piraeus is said to deem that the right conditions are now in place for the launch of a tender process for those loans, and decisions to that effect will be made soon, even though international economic conditions due to the coronavirus may delay the procedure for the time being.

UBS has undertaken to examine the investment interest and consider the alternative models this process could have, and the messages it has passed on to Piraeus Bank are very encouraging. It has contacted several investment funds, including Oak Hill, Farallon and Fortress.

It remains to be seen which funds will be invited to participate in the loan sale process and which will submit binding offers, but it is estimated there will be at least four.

Original Story: Ekathimerini |Ilias Bellos
Photo: Piraeus Bank site
Edition: Prime Yield