Brazilian lender Creditas valued at $4.8 billion

Creditas, a Brazilian start-up specializing in insurance, consumer loans and used car sales, has raised $260 million in a funding round that valued the company at $4.8 billion.

As the Financial Times reported, this financing comes as investors continue to bet on the burgeoning FinTech sector in Latin America.

“We want to continue growing fast,” said Creditas Founder and CEO Sergio Furio. “And that means that we need to invest in bringing in customers, so that over time, those customers generate the revenues in the recurring model we have.”

The new funding came a little more than a year after Creditas gained unicorn status following a $255 million funding round that valued the firm at $1.75 billion.

Founded 10 years ago, Creditas employs more than 4,000 workers and offers services in Brazil and Mexico. Its six funding rounds have yielded a total equity of $829 million. The company accepts three types of collateral — homes, vehicles and salaries — but instead of holding loans on its balance sheet, its credit portfolio is securitized and sold.

Furio declined to comment when asked if his company was planning to go public.

Last year saw Latin America receive record levels of venture capitalist funding, with $9.4 billion being funneled into companies in that region, more than double the amount from 2020. Nearly 75% of that money went to FinTech, eCommerce and PropTech companies. VCs backed 650 deals last year, with 16 FinTechs achieving unicorn status.

Original Story:| News 
Photo: Creditas website
Edition: Prime Yield

NPL ratio in Spain falls to a new low since March 2009

The Non-performing loan (NPL) ratio within the Spanish banking sector fell in November to 4.29%, marking a low since March 2009, according to provisional data from the Banco de España.

This downward trend is the result of a decrease in the total volume of bad loans in the bank’s sheets, which has been accompanied by an increase in total credit.

In November, the NPL ratio was 7 basis points (b.p) below the 4.36% recorded in October and 28 b.p. below the 4.57% of a year earlier. The gap is much wider than the peak set in December 2013, when it reached 13.62% of total loans.

Specifically, total credit in the sector increased by 1.03% in November to €1,226 trillion, a figure which, however, was 0.25% down on the previous year. 

The balance of doubtful loans fell by 0.73% in November 2021, to €52.6 bn. This fall was 6.37% compared with the total doubtful loans in the same month of the previous year.

Original Story: Rtve|Europa Press
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Translation & Edition: Prime Yield

Piraeus Bank sales €400 million project Dory to a David Kempner affiliate

Piraeus Bank announced it had reached a deal to sell a portfolio of nonperforming shipping loans (NPL) to an entity affiliated with Davidson Kempner Capital Management. 

The agreed price will be about 53% of the portfolio’s gross book value of €400 million, the bank said. 

The sale of the portfolio, dubbed project Dory, is subject to approval by the Hellenic Financial Stability Fund, a shareholder in Piraeus Bank, the lender said. 

The transaction will reduce Piraeus Bank’s ratio of non-performing exposures to about 15% from 16% at the end of September 2021 and increase its NPE coverage ratio to about 40% from 39%. 

The sale’s expected capital impact will be around minus 20 basis points versus the bank’s end-September total capital ratio.

Original Story: Ekathimerini |Newsroom 
Photo: Piraeus Bank website
Edition: Prime Yield

Intrum and Serengeti AM acquire NPL from Piraeus Bank

Piraeus Bank has sold a portion of its securitized bad loans (NPL) to Intrum and Serengeti Asset Management as part of efforts to clean up its balance sheet.

The transaction is part of Piraeus Bank’s so-called Sunrise transformation program announced in March and follows the closing of its €7.2-billion Sunrise I securitization.

Piraeus, one of the country’s four largest banks, said it had sold 44% of the mezzanine notes of its Sunrise II securitized bad loans to Intrum and 7% to Serengeti Opportunities Partners.

The Sunrise II portfolio comprises about 47,000 retail and corporate loans with a gross book value of €2.7 billion.

When it announced the deal in early November, Piraeus said the implied valuation of the sale, based on the nominal value of the senior notes and proceeds from the sale of the mezzanine and junior notes, corresponded to 47.4% of the portfolio’s gross book value.

Goldman Sachs Europe and Alantra CPAI acted as arrangers and financial advisers to Piraeus, which aims to achieve a single-digit nonperforming exposure ratio by early 2022.

Piraeus Bank will retain 5% of the mezzanine and junior notes of the Sunrise II securitization in line with relevant regulatory requirements, and all of the senior notes.The bank said the capital impact of the sale represented a 50-basis point boost to its total capital ratio in September.

Original Story: Ekathimerini |Newsroom 
Photo: Piraeus Bank website
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Santander launches its own servicer: Yera

Santander has already launched its new real estate ‘servicer’. The entity chaired by Ana Botín has registered the company Yera Servicer Company 2021, which will take over the management of part of the assets from Aliseda, following the agreement reached between Blackstone and the Spanish entity. 

The creation of this company is part of Santander’s internal reorganisation of the entire real estate segment. First, two years ago, it created Deva Servicer, on which this company will depend. The name of Yera is not definitive, nor is its board of directors, which is chaired by Jaime Rodríguez Andrade, together with Carlos Manzano, Juan Babio and Jaime Guasch.

What is definitive is the executive who will lead the project, Enrique Arnoso, a former senior executive of Banco Popular and Pastor who has been in charge of the Aliseda account for the last three years. Arnoso will be in charge of managing assets valued at €5 billion together with the team of 130 professionals that Aliseda is transferring to Yera.

This is a key move in the sector. Santander had not had its own servicer since it sold Altamira to Apollo in 2014. The Spanish entity holds a 15% stake in this platform, now owned by DoValue. It also has a 15% stake in Aktua, the former servicer of Banesto, now owned by Intrum, and 49% of Aliseda, Popular’s platform, in which its partner is Blackstone.

The creation of Yera means Santander is once again investing in this segment, as it did with Deva Capital, a subsidiary that advises large opportunistic funds and buys portfolios of real estate and loans from other banks. Following this agreement, Aliseda continues to focus on the management of the Quasar Project -€30 billion in assets from Popular- and on services to third parties: it is bidding for the management of Sareb’s assets together with four other servicers.

Original Story: Cotizalia| J.Zuloaga and R.Ugalde 
Photo: Santander Facebook
Translation & Edition: Prime Yield

Deva fund buys Novobanco’s NPL portfolio for €52.3 million

The Deva fund has paid €52.3 million to Novobanco for its Harvey Project, a non-performing loans (NPL) portfolio with a gross value of €164 million.

This was one of the main NPL portfolios still owned by the Portuguese bank by the end of 2021, which had been previously put in the market with an initial gross book value close to €640 million.

However, in the final stretch of the year the Portuguese bank decided to recast the portfolio composition, excluding some of the initial credits. 

The transaction was agreed with the Deva fund for €52.3 million – less than a third of the gross book value of the portfolio, which was €164.4 million.

In the statement sent to the Securities and Exchange Commission (CMVM), the financial institution writes that the sale “should have a marginal impact on Novo Banco’s capital position and income statement for 2021”.

Novo Banco assures that the sale contract “represents a reduction of €162.6 million in its stock of NPL.

Negócios understands that with this  operation the bank should reduce its NPL ratio to 5%.

Original Story: Jornal de Negócios | Hugo Neutel
Novo Banco website
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Overdue payments in credit cards double

Brazilians have been facing difficulties to keep their bills on time and, in 12 months, doubled the number of late payments in the revolving credit card.

Data from the Central Bank shows that in November, 19.13% of customers who use the revolving credit card were behind on their payments between 15 and 90 days. The percentage is almost double that seen a year earlier, when it was 9.68%.

The revolving card is the part of the account that is not paid in the month and is pushed to the next invoice. With this surge in delays, the revolving already has the second highest rate of delays in the historical series – and only loses for May 2015, when 19.18% of customers were late.

Isabela Tavares, credit analyst at Tendências Consultoria, says that this phenomenon can be attributed to deteriorating economic conditions, especially the high inflation and weakness in the labour market.

She explains that, faced with financial difficulties, consumers take emergency credit and without improvement in income in the following months, begin to delay payments.

“The revolving credit is a modality of easy access and high interest. Normally, it is used in emergency situations. The use of this credit has grown in the last four or five months due to high inflation and pressure on income. And now the delays have started to appear,” she says.

In November, Brazilians had R$48.5 billion in debt on their credit cards. This is the highest amount in history. As Isabela Tavares explained, the demand for this emergency credit – just like overdrafts – grows in times of economic difficulty: In the average of the past 12 months, Brazilians took R$17.9 billion per month in overdrafts.

In other words, customers have pushed almost R$18 billion per month in debt to the next month’s bill in the hope that their financial situation will improve.

The problem is that this is the most expensive credit currently available in the financial system. On average, the interest on this operation was 346.1% per year in November – the most recent data from the Central Bank. This means that a R$1,000 debt becomes R$4,461 after 12 months.

With such high interest rates and no significant improvement in the job market or in income, delinquency – when the debt is more than 90 days past due – already reaches 33.29%.

In other words, a third of customers who use the revolving credit card end up defaulting on their loans. That, economists say, is behind the high interest on this operation.

Isabela Tavares notes that this worsening risk of default already influences the interest rates charged by banks. “The credit risk is already perceived and, since the 3rd quarter of 2021, it is possible to see an increase in margins on these operations. Banks are passing on the increased risk”.

Original Story: CNN Brazil|Fernando Nakagawa 
Photo: Photo by Lotus Head in FreeImages
Edition: Prime Yield

Waterwheel Capital Management joins doValue client portfolio

Waterwheel Capital Management has joined doValue’s portfolio of clients through the completion of the €3.2 billion (bn) Project Mexico HAPS securitisation in Greece.

Founded in November 2017, Waterwheel Capital Management is a US based institutional investor focused on targeted investment opportunities, and currently concentrated on Greek assets including the non-performing loan (NPL) market.

As a reminder, in H1 2021, Eurobank has started the HAPS securitisation process for the €3.2bn Mexico Portfolio (already under management by doValue). As part of Project Mexico, Waterwheel Capital Management has acquired a 90% stake in the mezzanine and junior notes related to the securitisation of the portfolio with doValue retaining the related servicing mandate of the Mexico Portfolio.

The completion of the €3.2bn Project Mexico with Eurobank and Waterwheel Capital Management (which follows the completion of the €5.7bn Project Frontier with National Bank of Greece, Bain Capital and Fortress) reinforces doValue leadership as a servicer in the Greek HAPS securitisation market.

Original Story: Market Screener | PR 
Photo: Photo by Sergey Klimkin in FreeImages
Edition: Prime Yield

BBVA securitizes project finance loan portfolio valued at €500 million

Spain’s BBVA has closed its first balance sheet synthetic securitization of a project finance loan portfolio. This a transfer of risk to institutional investors Alecta and PGGM that allows the bank to free up 80% of the capital on a portfolio of project loans that will remain on the bank’s balance sheet.

BBVA has closed a risk sharing transaction with Alecta and PGGM for a project finance loan portfolio worth 500 million euros. This portfolio represents a variety of projects, mainly in Spain and Western Europe, with one third of the portfolio consisting in renewable energy related projects, as that has been a clear focus in BBVA origination activities. The bank retains a risk alignment of minimally 20% for each project in the portfolio.

The transaction also establishes a framework for future collaborations with institutional investors PGGM and Alecta, which rely on BBVA’s origination capabilities to continue investing and provide the bank with capital that will allow it to continue promoting projects that help combat climate change.

BBVA has been actively using credit risk sharing to capitalize their small- and medium-size lending activities, and is now expanding this to its project finance loan book. This is a further step in the sophistication of risk management in its wholesale banking business. 

Original Story: Webwire | PR 
Photo: BBVA website
Edition: Prime Yield

Brazilian savings see biggest reduction in 5 years amid rising inflation

Brazilian savings accounts suffered their biggest outflow in five years in 2021, official figures showed, as financial conditions deteriorated for families and companies amid double-digit inflation and aggressive interest rate hikes.

Brazilians boosted their bank savings by a net 7.7 billion reais in December, the lowest figure for the month in six years.

That took the annual total to a 35.5 billion reais ($6.23 billion) outflow, the first negative number since 2016. The balance of savings accounts in Latin America’s largest economy ended the year at 1.03 trillion reais.

In contrast, savings accounts grew by a record 166.3 billion reais in 2020 as the government spent heavily to combat the effects of the COVID-19 pandemic, including via cash transfers to the poorest, a program that was substantially reduced in 2021.

Also, from March, an increase in the Selic benchmark interest rate amid rising inflation made savings rates less competitive compared to other fixed income investments.

The central bank more than quadrupled its benchmark rate last year to 9.25% from 2% and has already signalled another 150 basis point hike in February.

The annual rate of inflation in mid-December stood at 10.42%, far above the central bank’s year-end target for consumer price inflation of 3.75%. The central bank acknowledged inflation has proven to be more persistent than anticipated, stirred by surging fuel and energy prices.

Original Story: Reuters| Marcela Ayres 
Photo: Photo by Magda S in FreeImages
Edition: Prime Yield

Alpha Bank completes “Project Aurora” securitization

Alpha Bank has completed the securitization of a loan portfolio worth €1.9 billion with Christofferson, Robb & Company (CRC) as lead investor, along with AnaCap Financial Partners and the European Bank for Reconstruction and Development (EBRD).

The “Project Aurora” portfolio concerns performing corporate loans and will relieve the lender’s financial report of provisions of €1.2 billion, Alpha said.

The transaction forms part of Alpha’s announced business plan “Project Tomorrow,” and is expected to contribute some 47 basis points to its Total Capital ratio 1 as of September 30, 2021.

Original Story: Ekathimerini |Newsroom 
Photo: Alpha Bank website
Edition: Prime Yield

Novobanco sells NPL portfolio with a 70% discount

Portugal’s Novobanco completed the sale of the Project Orion, comprising non-performing loans (NPL) and related exposures, to a consortium of funds managed by British company West Invest and Luxembourg-based LX Partners (LXP). 

In a statement sent to the Securities and Exchange Commission (CMVM), the financial institution led by António Ramalho said that this portfolio, which in September 2021 had an outstanding balance of €231.3 million, was sold for a total amount of €64.7 million. That is, with a 70% discount in relation to the gross value.

The Portuguese bank stresses that the completion of this transaction “is expected to have a marginal positive impact on Novobanco’s capital position and in 2021 income statement.”

“Together these agreements represent a €168.1 million reduction of non-performing loans (“NPL”) and are an important milestone for Novobanco, allowing the Bank to pursue its strategy of converging towards EU average,” stresses the bank controlled by the American Lone Star, which this Thursday received 112 million from the Resolution Fund.

Original Story: eCO News | Luís Alexandre
Photo: Novo Banco
Edition: Prime Yield