Piraeus Bank Presents Healthy Outlook as it Cuts Exposure to Bad Loans

Piraeus Bank, one of Greece’s four biggest lenders, reported a significant drop in its exposure of bad loans.

“Our NPE (non-performing exposures) reduction plan is well on track with more than 90% of actions already executed. NPE reduction in the first nine months of the year amounted to 16 billion euros, bringing our NPE ratio down to 16%,” Chief Executive Christos Megalou said.

The reduction of NPE helped Piraeus Bank to announce a smaller loss in Q3 than the previous three months. The bank reported a net loss from continued operations of 635 million euros, down from 2.045 billion euros in the second quarter, as loan impairment provisions slumped to 811 million euros from 2.28 billion.

The Bank announced that in the first nine months of 2021 it has granted 4.6 billion in new financing, in line with its target of €5.7 billion for the whole year. During the same period, customer deposits and mutual funds have increased by €3.4 billion.

Original Story: Greek Reporter | Tasos Kokkinidis 
Photo: Piraeus website
Edition: Prime Yield

DBRS: NPL will increase, but how much is still uncertain

The impact of the withdrawal of advanced measures due to the pandemic is not certain, but it should lead to an increase in non-performing loans. The deterioration will depend on the economic recovery of countries, says DBRS.

Portuguese banks managed to reduce non-performing loans (NPLs) during the pandemic, and this, along with the provisions made, improved the banks’ coverage ratio, according to rating agency DBRS. Still, it is necessary to wait and see the effects of the reversal of the support measures. In addition, DBRS also notes that Portugal still has several moratoria pending and the effect on credit is still uncertain.

According to the data from EBA, the NPLs of Portuguese banks “declined significantly between Q4 2019 and Q2 2021 (-42%), also leading to an improvement in the NPL ratio to 4.2% at the end of Q2 2021 from 6.5% at the end of Q4 2019″, DBRS signals in a commentary where it analysed the situation in Italy, Greece, Spain, Portugal, Ireland and Cyprus.

In addition, Portuguese banks have also increased provisions since the end of Q4 2019, which, together with the reduction in NPL, “resulted in the banks’ coverage ratio improving to 58.4% at the end of the second quarter of 2021 from 50.1% at the end of the fourth quarter of 2019”, they add.

The rating agency also notes that while Spain, Ireland, Greece and Cyprus “evenly distributed NPLs between households and non-financial companies”, in the remaining NPLs in Italy and Portugal non-financial companies have more weight. This suggests a pipeline skewed towards small and medium-sized enterprises and corporate loans, rather than individual borrowers, in Italy and Portugal.

Already looking at moratoria granted, EBA-covered banks in Portugal had 73% still outstanding at the end of Q2 2021, followed by EBA banks in Italy (23% of total moratoria granted) and Spain (13% of total moratoria granted) at the end of Q2 2021.

To do this analysis, DBRS also looked at the evolution of key metrics, forecasting that unemployment in Portugal will have a slight drop in 2022. Growth in the Portuguese economy will also be higher next year, unlike the other countries analysed. In terms of property prices, Portugal is well above the other countries, having shown a very sharp upward trend

DBRS thus concludes that the “comprehensive response from European governments and the EC has so far been effective in preventing an increase in NPLs” in these jurisdictions in the short term. Unemployment and residential property “have performed better than expected in these jurisdictions, with Portuguese property price increases outperforming other jurisdictions”, they stress.

The agency also notes that the effects of the reversal of the relief measures have yet to be assessed, with NPLs expected to increase, but “deterioration will depend on several factors, including the country’s full economic recovery.

Original Story: ECO | Mariana Espírito Santo 
Photo: Big Stock Photo
Translation & Edition: Prime Yield

Manager of R$ 5 billion in agrobusiness NPL triples deals

Last May, the Central Bank recorded an accumulation of R$ 306.8 billion in agribusiness debts within the financial system. At the time, consultants’ surveys also showed an inventory of approximately R$ 600 billion with non-financial agents, such as trading companies and suppliers, maturing until February 2020.

These are the most updated figures known. But there is an unspecified amount of practically unrecoverable debts.

But considering the sector’s gains that have been accumulated for several harvests, especially among cereal producers, the reduction is felt among the agents that operate in the various credit recovery ends.

This is where NPL Brasil comes in, one of the main managers of nonperforming loans (NPLs) in the country, managing over R$ 5 billion of the defaulted (or non-performing) agribusiness portfolio. This still represents 80% of the total value of credits managed by NPL, but is falling.

“From January to August, the number of rural producers almost tripled,” says NPL CEO Christian Ramos, making reference to debtors’ demand to be able to save their financial situation with institutions and companies.

Basically, NPL, which qualifies itself as the largest independent manager in this niche business, buys the portfolios of the creditors and will seek the repactancing with the debtors.

According to the perspective of NPL’s CEO, the projections are for a 250% increase in agreements within the agribusiness chains.

Original Story: Agro Times| Giovanni Lorenzon 
Photo: Photo by Magda S for
Edition and Translation: Prime Yield

Itau profit jumps 35% on Q3 driven on lower charges and more lending

Brazil’s biggest lender Itau Unibanco posted a 34.8% jump in its third quarter profit from a year earlier, driven by loans for individuals, lower provisions and higher fee income.

Recurring net income, which excludes one-off items, came in at 6.779 billion reais ($1.22 billion), in line with an estimate compiled by Refinitiv of 6.735 billion reais. Its return on equity, a gauge of profitability, was at 19.7% in the third quarter.

In a statement, Chief Financial Officer Alexsandro Broedel said the bank is on track to deliver a solid performance in 2021 and has put itself on a path to continued growth in 2022.

Itau’s loan book rose 5.9% in the quarter and 13.6% year-over-year, mainly helped by car loans, credit cards and mortgages.

The rapid expansion of retail loans alongside higher trading gains resulted in a 15.3% rise in net interest income, to 19.515 billion reais, from a year earlier.

The bank’s 90-day loan default ratio rose to 2.6% from 2.3% in the previous quarter. Still, loan loss provisions fell 17.2% year-over-year, to 5.232 billion reais.

Fee income rose 6.4% from a year earlier, even as brokerage XP Inc’s results, once incorporated into the fee income line, are no longer consolidated into Itau. It was boosted by credit cards, funds and advisory.

Despite a collective bargaining agreement which secured Brazilian banking sector workers a 11% raise in September, Itau’s operating expenses edged up only 1% from a year earlier, well below the double-digit inflation rate in Latin America’s biggest economy.

Original Story: Reuters | Carolina Mandl 
Photo: Itaú website
Edition: Prime Yield

Distressed funds buy real estate loans as defaults soar

Surging construction costs are sending delinquency rates skyrocketing among Brazilian developers, persuading a growing number of lenders to dump their loans and creating a feast for distressed-asset funds, Bloomerg News reported.

“I’m dealing with explosive demand from banks trying desperately to sell loans they made to construction firms”, said Eduardo Martins, a partner at MGC Holding, one of Latin America’s biggest distressed-asset managers.

MGC, which oversees a face value of 23 billion reais ($4.21 billion) in consumer loans, has hired three executives since August to start a unit to analyse corporate real estate credit.

The delinquency rate for builders reached as high as 20% in May for loans carrying market rates, meaning borrowers weren’t paying on time on 3.4 billion reais in loans, according to the central bank. The rate fell to 4%, or about 141 million reais in defaults in September, a reduction the central bank said could be explained by different forms of debt renegotiation.

Original Story: Bloomberg|Cristiane Lucchesi 
Photo: Photo of Afonso Lima in
Edition: Prime Yield

Greek Central Bank calls for more efficient management of NPLs

Bank of Greece governor Yannis Stournaras urged nonperforming loan (NPL) servicers to exploit an existing regulatory framework and to make more efficient management of debt, ANA reports.

In an interview with “Naftemporiki” financial newspaper, the responsible noted that these NPLs were out of banks’ balance sheets but this debt was not disappearing. “For this reason,” he said “it is important that NPL servicers manage the stock of NPLs more efficiently. This means exploiting an out-of-court mechanism for debt settlement and a recent new law on debt settlement and bankruptcy. It is important that servicers offer sustainable solutions to debtors or more efficient management of collateral – when necessary – to facilitate the return of debtors to the production process.” 

In the same occasion, he also stressed that successful management of NPLs by servicers is a prerequisite for the success of the Hercules program.

Original Story: Tornos News | News 
Photo: Bank of Greece
Edition: Prime Yield

Axactor buys Project Bramall-Lane from Santander

Axactor has acquired the Project Bramall Lane from Santander, a nonperforming loans (NPL) portfolio valued in 459 million euros made up of 38.516 unsecured loans.

Following a competitive process in which several companies in the sector have submitted their bids for the portfolio, Axactor is now the new owner of Santander’s Project Bramall-Lane, completing its second acquisition so far this year.

Andrés López, Country Manager Axactor Spain commented: “For us this operation is a great success, both for the quality of the portfolio and for the work done, endorsing our internal processes in future projects. Axactor Spain will continue to monitor market movements in search of new opportunities, and try to close similar operations before the end of the year”

Original Story: Axactor
Photo: Santander Facebook
Translation & Edition: Prime Yield

Portugal’s six main banks report a combined €1.04 billion profit until September

Six of the main banks operating in Portugal had a combined €1.043 billion in profit in the first nine months of this year, contrasting with combined losses of €178 million in the same period of 2020.

Contributing to the turnaround was, above all, Novo Banco which went from losses of €853.1 million in the first nine months of 2020 to a profit of €154.1 million in the same period this year.

This year is the first in which the bank – which created in 2014 to carry on the commercial business of Banco Espírito Santo, which that bank was wound up – has had a positive result.

The highest nine-month profit was that of state-owned Caixa Geral de Depósitos (CGD), which reported €429 million, up 9.4%.

BPI, meanwhile, almost tripled its profit to €242 million.

BCP and Santander, by contrast, saw their profits fall. BCP’s fell 59.3% to €59.5 million and Santander’s 32% to €172.2 million.

Banco Montepio, for its part, narrowed its nine-month loss to €14 million from a €57 million loss a year earlier.

Despite the renewed profits for most banks, executives said that profitability in the sector remains very low in relation to the money invested by shareholders.

At CGD’s results presentation, CEO Paulo Macedo said that in recent years the aggregate profitability of banks has been negative and stressed that shareholders’ money has to be remunerated.

“There are those headlines that banking earns I don’t know how much a day, when Caixa has 9.4 billion euros in capital that it has to remunerate,” he said. “It has to return money to taxpayers.”

Macedo announced that CGD would pay in November an extraordinary dividend of €300 million to its sole shareholder, the Portuguese state, in addition to the €83.6 million already paid out this year.

He added that although the CGD results were very positive, the future business conditions it faces are “very difficult”.

Banking consolidation, a recurring issue in recent years, was one of the themes of the results presentations.

BCP’s CEO, Miguel Maya, said it was not looking to make any acquisitions: “Let that be clear.”

BPI’s CEO, João Pedro Oliveira e Costa, also said that the bank he runs took a similar view: “We are not focused there and it is not just talk, it is not our point.”

Novo Banco’s CEO, António Ramalho, by contrast, said that it may weigh up the purchase of smaller banks in good time.

“We will look at all growth hypotheses, especially in the second tier of banks,” he said, stressing that possible acquisitions can be made from the moment the bank concludes its own restructuring process.

In terms of the moratoria on loans, which ended for most at the end of September, the bank CEOs said they were not too worried about defaults, noting that – despite there being problems – the vast majority of customers were paying their debts regularly. But they also said that the situation would evolve depending on economic developments and employment.

In August, the government approved legislation to force banks to restructure oustanding loans to customers who, after the moratoria, have problems paying their debts. CGD has already restructured loans to 3,000 households (totalling €330 million) and 600 companies (with a total €150 million); other banks have not disclosed these figures.

Original Story: Macau Business |Lusa 
Photo: Photo by Armindo Caetano in
Edition: Prime Yield

Montepio to sell 300 million NPL “Project Gerês” portfolio

Bank Montepio is analysing the transfer of between 1 and 2 billion euro in toxic assets to a specialised vehicle, aiming to perform a «carve-out» operation. And has already placed a new 300 million euros NPL portfolio on the market.

Named “Project Gerês”, this is a granular NPL portfolio, whose sale process is being managed by KPMG. The 300 million euro concern the gross value of the credits, excluding the impairments registered by the bank for this set of contracts and loans.

The bank has one of Portugal’s highest toxic asset rates, having registered in June an NPE (Non-Performing Exposure) ratio of 9.3%, according to the second quarter’s statements. During the same period, the banking system showed an NPL rate of 4.3%, below the 5% rate required by the European authorities.

Original Story: Iberian Property |Ana Tavares 
Photo: Montepio website
Edition: Prime Yield

INVEL completes €70 million transactions in the Greek market

Invel Real Estate (INVEL) announced the completion of two transactions in the Greek Market, reinforcing in 70 million euros its investment in the country.

The real estate investment and asset manager has acquired a single-borrower nonperforming loan (NPL) portfolio, secured against logistics assets in Greece and comprising a total of 55 million euros of unpaid principal balance, from a pool of Greek banks and in the cooperation with the borrower.

In a separate transaction, Invel has provided a 15 million euros secured corporate facility to the AIM-listed owner of a number of high-end hospitality and residential development projects in Greece and Cyprus. The facility was sourced off-market and was raised by the borrower to generate free cash flow following a challenging period created by the Covid-19 pandemic.

Alexis Pipilis, Invel’s Head of Acquisitions in the Hellenic region, says: “These recent deals not only demonstrate the strength of our network, relationships and platform in Greece and southern Europe, but our capabilities to undertake complex opportunities and provide creative, flexible and efficient solutions. In particular, we have a unique track record in co-operative NPLs, something that is particularly key in the successful realisation of such transactions in our core markets where the legal frameworks differ from the more established markets of northern Europe, as well as the credit market more broadly. We have successfully agreed a number of these transactions in several European jurisdictions in recent years and see significant opportunities for growth in the future.”

Since 2013, Invel has become the largest ever investor in the Greek real estate market, having acquired a 98 % equity stake in PRODEA Investments, formerly known as NBG Pangaea REIC for 1 billion euros. Under Invel’s steering, PRODEA Investments has since increased in size and it is now the largest listed REIT in Greece with a GAV of circa 2.4 billion euros.

Original Story: Property Funds World | News 
Photo: Photo by Toomas Järvet for
Edition: Prime Yield

KKR buys a 200 million NPL portfolio from CaixaBank

US manager KKR has bought a nonperforming loans (NPL) portfolio with a nominal value of 580 million euros from CaixaBank. The deal was closed for 200 million euros, a vlue that reflects a discount of about 65%. KPMG was the adviser.

These credits will be managed by KKR’s servicer, Hipoges Iberia, which is keen to show to Spain’s bad bank Sareb that it can carry out the management of large NPL portfolios. According to El Confidencial, Hipoges Iberia is presently competing with the traditional servicers for the tender launched by the ‘bad bank’, concerning a portfolio of hotels and non-strategic land with an original value exceeding 1,500 million euros. 

Original Story: Iberian Property | Alexandre Lima 
Photo: CaixaBank website
Edition: Prime Yield

2022 will be more challenging for loans, says Santander Brasil CEO

Banco Santander Brasil SA will face a more challenging environment for loan growth and repayments in 2022 in light of the rising benchmark interest rate and high inflation in Latin America’s biggest economy, Chief Executive Sergio Rial said.

Rial said the bank’s consumer loan book was likely to expand between 9% and 12% next year, a steep decrease from the roughly 20% growth it is poised to post this year, and predicted fewer people will seek a mortgage because of higher interest rates.

Rial did not provide any estimate for loan defaults, but said the scenario will be “more challenging” in 2022.

Its 90-day loan default increased 0.2 percentage point in the third quarter to 2.4%, while loan-loss provisions also grew.

Many economists are slashing their GDP outlook for Brazil. Itau Unibanco Holding SA said GDP is likely to shrink 0.5% in 2022, as a hike in the benchmark interest rate is expected to tame inflation.

The Brazilian unit of Spain’s Banco Santander reported a recurring net income of 4.340 billion reais ($769.45 million), up 12.5% from a year earlier, driven by higher net interest income and fees.

The result gave Santander Brasil a return on equity (ROE) – a gauge of profitability – of 22.4%, its highest on record.

Analysts praised Santander Brasil’s performance in notes to clients, but highlighted some points of concern.

“Loan loss provisions and defaults started to come under pressure,” analysts at BTG Pactual wrote.

Original Story: Reuters | Carolina Mandl 
Photo: Santander Br
Edition: Prime Yield

Number of defaulters reached 62.21 million people in September

The number of defaulters in Brazil reached 62.21 million people in September, which represents a slight retraction (0.06%) compared to the previous month.

According to the Map of Delinquency and Renegotiation of Debts in Brazil released by Serasa, this is the lowest figure since April, when 62.98 million Brazilians were registered in this situation.

According to the monthly study, the number of total debts in Brazil is also the lowest recorded in the period, with a drop of 0.16% compared to August, totalling 208.46 million accounts.

According to the survey, despite the drop in defaults, the total value of debts in September rose 0.34% compared to August, adding up to R$ 245.3 billion. The average value of debt is R$ 3,944 per person and R$ 1,177 per debt.

The banks and credit cards segment continues to lead the list of accounts responsible for delinquency, representing 28.7% of them, followed by debts of basic accounts such as water and electricity (23.5%) and retail with 13%.

“These figures show that Brazilians are seeking opportunities to renegotiate with differentiated conditions and that creditor companies increasingly understand the importance of offering these conditions for people to renegotiate: in September alone, there were more than R$ 3.27 billion in discounts granted in renegotiations by Serasa Limpa Nome,” said Serasa manager Nathalia Dirani.

The states with the most defaulters are São Paulo (14.67 million), Rio de Janeiro (6.18 million), Minas Gerais (5.82 million), Bahia (4 million) and Paraná (3.29 million).

Original Story: Agência Brazil |Flávia Albuquerque 
Photo: Photo by Bruno Neves for
Translation and Edition: Prime Yield

Eurobank signs deal with doVale to sell a €5.2 billion NPL portfolio notes

Eurobank, one of Greece’s four largest lenders, signed a deal with credit servicer doValue to sell a portion of mezzanine and junior notes of a 5.2 billion euro nonperforming loan (NPL) portfolio securitisation.

Greek banks are cleaning up their balance sheets from non-performing loans via outright sales and securitisations in an effort to reach single-digit NPL ratios next year to bring them close to eurozone averages.

The portfolio of NPL, dubbed project Mexico, has a gross book value of 3.2 billion euros and doValue will be servicing the sour loans.

The transaction is expected to be completed by end-December subject to certain conditions, including the issuance of a ministerial decision to include the Mexico securitisation in the government’s Hercules II bad loan reduction scheme.

Eurobank said the NPL of the Mexico securitisation will be reclassified as ‘held for sale’ in the third quarter.

Completion of the sale of Mexico notes and the derecognition of Mexico loans will take place in this year’s fourth quarter.

The transaction will have no material impact on Eurobank’s regulatory capital ratios and its NPE (non-performing exposures) ratio is expected to stand at 7.3%.

Alantra Corporate Portfolio Advisors International advised Eurobank on the sale.

Original Story: Reuters | Staff 
Photo: Eurobank website
: Prime Yield

Sareb sells its stake in the Socimi Tempore

Spanish bad bank Sareb has agreed the sale of its 21.22% stake in the Socimi Tempore to the fund Texas Pacific Group (TPG), owner of the remaining 79.78%. According to the daily newspaper Cinco Días, the deals should be closed before the end of the year. Sareb’s stake is worth 32.65 million euros.

One of the largest homeowners in Spain, along with Blackstone, CaixaBank, CBRE IM, AXA, APG and Aware, Tempore’s portfolio is made up of about 3,000 dwellings, with a gross value of 377 million euros. 

In the first semester of 2021, Témpore received 7.12 million euros from the operation of its houses, about 400,000 euros more than in the same period of 2020. Some operating expenses, the amortization of the properties and the debt catapulted the final result to losses of 1.26 million. The total debt amounts to 237.44 million, almost 7.5 million more than at the end of fiscal year of 2020.

Original Story: Iberian Property |Alexandre Lima
Sareb Linked In
Edition: Prime Yield

Millennium bcp set to sale the €100 million “Project Lucia”

Millennium bcp bank has put for sale the Project Lucia, a portfolio consisting of 60 million euros in nonperforming loans (NPL) and further 50 million euros in real estate owned (REO) assets. The sales process is being led by KPMG.This isn’t the only portfolio that the Portuguese bank has currently in the market. In August, bcp had already put Project Green up for sale, a 160 million euros portfolio composed of NPLs and REO from the Castro Marim and Monte Rei luxury resorts, both in Algarve.

However, the Castro Marim resort properties would be excluded from the portfolio, due to the low bid values offered by investors. The assets from Monte Rei remain though, but it isn’t certain that the deal will be concluded due to the value of the offers on the table, according to what several sources knowers of the process told to ECO. Bank of America Merrll Lynch and Bybrook are the bidders.

Original Story: ECO News | News 
Photo: Millennium bcp website
Edition: Prime Yield