NPL&REO News

Housing loans’ stock hit €96.6 billion, hitting a 5 year high

14 February, 2022

The stock of housing loans totalled €96.9 billion last December, up 1.99% compared to the same month of 2020 and hitting a new maximum since at least 2016, according to Bank of Portugal data.

According to the central Bank latest data, the total amount borrowed on housing loans (€96.9 billion) in December means 1.99% more compared to December 2020 and 0.37% compared to last November.

This is still the highest `stock’ value of home loans since at least December 2016.

Already the ratio of overdue loans on housing was 0.5% in December (the same as November and down from 0.6% in December 2020).

In consumer loans the amount lent in December was €19.2 billion, up 0.23% compared to December 2020 and 0.17% compared to November.

According to the Bank of Portugal, “the pace of growth in consumer loans continues to lag behind the years prior to the pandemic”.

In loans for other purposes were borrowed 8.9 billion euros in the last month of 2021, up 36% from December 2020 and 0.33% more than in November.

Regarding the non-performing loans (NPL), the NPL ratio for Consumer credit and other purposes was 4.5% in December (down from 6.3% in December 2020 and 4.6% in November).

As for companies, 75.7 billion euros in credit were granted in December, in this case up 2.3% year-on-year but down 0.48% on November. In this case, 2.3% of the total amount of loans was in default (down from 3.3% in December 2020).

“This was the lowest value recorded since 2008, extending the downward trend observed since late 2016,” says the Bank of Portugal, adding that the reduction in the NPL ratio is more significant for companies in the construction and real estate activities sectors (it went from 10.3% and 4.8%, respectively, in December 2020, to 7.5% and 2.4% in December 2021).

As for deposits, last December, individuals had deposited €172.9 billion, up 6.8% compared to December 2020. Household deposits are at their highest since at least December 2016.

The central bank highlights demand deposits, as, “at the end of 2021, they represented 48% of the total deposits of private individuals”.

The amount of corporate deposits in banks in Portugal, meanwhile, grew by 17.0% compared to 2020, to €61.8 billion.

“It is necessary to go back to the end of 2010 to find growth rates similar to those seen in the two years of the pandemic,” says the Bank of Portugal.

Original Story: RTP| LUSA
Photo: Photo by Svilen Milev in FreeImages
Translation & Edition: Prime Yield

Funds are now the main drivers of property auctions in Greece

14 February, 2022

Funds that have acquired Greek bond portfolios are now the main drivers of property auctions, taking over from banks, with over 70% of assets scheduled to go under the hammer within 2022 via the e-auction platform having various funds as their sellers.

Data from the online platform of notaries reveal that the landscape has change concerning the sellers at auctions in favour of the special-purpose vehicles with various exotic names (Cairo, Galaxy, Sunrise, Vega, Pillar, Mexico, Orion etc.), pointing to securitizations and sales of bad loans by banks in recent years.

Data compiled by Kathimerini, based on the processing by the iMEDd Lab, show that funds are behind 70.7% of the online property auctions planned for 2022 in Greece. There are over 9,900 auctions listed on the platform for the entire 2022, and the list is growing every week.

Until recently, banks were behind up to 84% of auctions, but their share has now gone down to just 22.2% for this year. Another 7%, approximately, concerns private owners or other corporations.

The dominance of funds also changes the policy in the domain of auctions, which will constitute a vital instrument for “Hercules” to meet its targets. This is the state mechanism that has guaranteed a significant share of the revenues from the securitizations that banks have implemented.

Kathimerini understands that the business plans funds have submitted to the state for it to supply state collateral for the securitizations provides for 40%-50% of the takings of funds to come from real estate asset liquidation. That makes auctions a priority for the new owners of the bad loans in order for the business plans to be executed and the state collateral activation to be averted.

Contrary to banks’ policy in recent years, with lenders pressuring borrowers by buying back 80%-90% of the assets the banks themselves had put up for auction, the funds seek the genuine resale of those properties to third parties.The funds only buy back certain properties that are particularly popular for commercial purposes and can secure even higher prices later on. However, their main strategy is far from buying back the assets they auction, as they prefer to collect as much money as possible from the first stage and achieve their targets.

Original Story: Ekathimerini |EvgeniaTzortzi
Photo: Photo by Jason Morrison in FreeImages
Edition: Prime Yield

Brazil’s outstanding loans rise 16.5% in 2021

14 February, 2022

The amount of outstanding loans in Brazil grew 1.9% in December from November to 4.684 trillion reais ($865.55 billion), ending last year with an increase of 16.5%, the central bank said.

A broad measure of Brazilian consumer and business default ratios came in at 3.1%, unchanged from the previous month.

Original Story: Reuters|Marcela Ayres
Photo: Photo by Cesar Fermino in FreeImages
Edition: Prime Yield

Mortgage granting hits a 12 year high

14 February, 2022

The number of housing loans signed in Spain increased by 24.1% last November.

With the end of the sixth wave of the coronavirus pandemic finally in sight, the global economy is strengthening day by day and nowhere is this more evident than in the property market in Spain, which has been improving in leaps and bounds.

The number of mortgages approved in Spain increased by 24.1% year-on-year last November, making this the strongest month since 2010. A total of 36,220 home loans were signed, according to latest data released by the National Institute of Statistics (INE).

These figures reflect the impressive rebound of the Spanish real estate sector, which closed out last year with some 400,000 loans, making 2021 “the best mortgage year of the last decade” according to the experts.

November’s figures follow nine months of consecutive increases. The average amount of home mortgages sought jumped by a substantial 1.5% to 138,189 euros, while the capital granted also grew by 26% to 5,005 million euros. The majority of the loans were granted in Andalucía (7,583), Catalonia (6,222) and the Community of Madrid (5,682).

Original Story: : Spanish News Today| News
Photo: Big Stock Photo
Edition: Prime Yield

Montepio closes the sale of a €253 million NPL portfolio

4 February, 2022

The deal was closed with LX Investment Partners III, BTL Ireland Acquisitions II Designated Activity Company and BTLP Acquisitions.

Montepio bank announced on 31 December the sale of a non-performing loans (NPL) portfolio valued at 253 million euros, including 10,318 on-balance-sheet and off-balance-sheet contracts.

The deal was made “after a competitive sale process”, through the signing of «a public deed of sale of a portfolio of non-performing loans, in the form of direct sale to the entities LX Investments Partners III, BTL Ireland Acquisitions II Designated Activity Company and BTLP Acquisitions I Unipessoal, Lda, companies validly incorporated and governed by Portuguese law and headquartered in Portugal”, can be read in the note sent by the bank to the CMVM.

According to Montepio, “after the total derecognition of the credits, the estimated impact of this sale on Banco Montepio’s results will be immaterial, representing, however, an important reduction in non-productive exposures, contributing to a decrease of 1 percentage point in the NPE ratio”.

For now, the transaction “contributed to an increase of 3 base points in Banco Montepio’s Total Capital ratio, consolidating the strategy launched by the Board of Directors of continuous reduction of non-productive assets and reinforcement of capital ratios”, it can also be read.

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

Caixa Econômica raises real estate financing rate with savings resources

4 February, 2022

Caixa Econômica Federal is warning real estate agents that its interest rate on credit with savings resources (SBPE) to finance the purchase of real estate will rise in February.

The lowest rate, charged to customers who have a relationship with the bank, the largest real estate lender in the country, will change from the current 8.3% per year to 8.7% per year, always plus the TR, as of February 1st, according to publicity material to which Reuters had access. The over-the-counter rate will be maintained at 8.99% pa

With the change, Caixa will start to practice a rate closer to that offered by its competitors in the private sector. Santander Brasil had from 9.99% per year, compared to 9.5% for Bradesco and 9.1% for Itaú Unibanco, all plus TR.

The move comes days after the chief executive of the state bank, Pedro Guimarães, predicted a 10% increase in lending for real estate purchases in 2022, in an interview with Reuters, claiming he has lower interest rates than most. of competitors.

In a note, Caixa stated that there will be an “adequacy in the conditions for the application of reducers… depending on the customer’s relationship with the bank” and that “it will continue to have the best interest rates on the market”.

Original Story:Pymnts.com| Yadunandan Singh
Photo: Rodrigo de oliveira
Edition: Prime Yield

Green light for Spain’s State to increase its stake in Sareb

4 February, 2022

A new law allowing the State to own more than 50% of the divestment company may mean more council houses on private estates

After the financial crash in 2008, Spain founded the private company Sareb in 2012 to manage and liquidate bad loans and to buy up and dispose of the banks’ toxic assets, including risky stocks and real estate. This entity is currently 54.1% owned by private banks and insurance companies, and 45.9% owned by the public Fund for the Orderly Restructuring of the Banking Sector(FROB). Now, though, Spain has passed a law that will allow the State to hold a stake of more than 50% in Sareb in order to take control of the company.

Basically, the new law opens the door to allow the government to increase its stake in Sareb at the cost of the rest of the shareholders, including most of the banks, thereby reducing their power and weight in the company’s capital. This buy out may even be done for a symbolic price of just a few euros given that the institutions have been making provisions for the deterioration of their investment.

Currently, the FROB is the main shareholder with 45.9% of Sareb, followed by Banco Santander (22.2%), CaixaBank (12,24%), Sabadell (6,61%), Kutxabank (2,53%), Ibercaja Banco (1.43%) and Bankinter (1.37%), among others.

Although the State will take control of Sareb, the company will still have a specific corporate regime so that it can maintain “the necessary agility to carry out its divestment function”, although, according to a press release from the Ministry of Economic Affairs, the regime of commercial and senior management contracts will apply.

As an alternative to selling off empty homes to private buyers, Sareb has begun diverting more of its properties to subsidised social and council housing as part of its corporate social responsibility strategy. The government now wants to strengthen this commitment, “in order to maximise the social utility of these properties and the positive impact of the company on society”. In this way, the new government takeover of a majority share in Sareb may see a larger proportion of its seized properties being repurposed for cheap council houses and flats for those unable to afford a home in Spain.

Original Story: Spanish News Today| News
Photo: Sareb Linked In
Edition: Prime Yield

Greece’s systemic banks set to hit NPL reduction goal this year

4 February, 2022

All four Greek systemic banks will have attained the goal for the reduction of their nonperforming loans (NPL) below 10% by the end of this year: Eurobank already reached it at the end of 2021, Alpha Bank and National Bank should make it by the end of the year’s first half and Piraeus will achieve it by year-end.

Toward the end of 2021 banks accelerated their efforts to reduce their NPL pile, summarily executing transactions worth a total of €25 billion through securitizations and sales of portfolios, though they still have quite a way to go before they hit the European average.

Even if the business plans for the full streamlining of banks’ fundamentals are adhered to perfectly, the average level of the NPL index in 2022 for the four main lenders will be three times the European average, which according to the latest European Banking Authority (EBA) data for the first half of 2021 amounts to 2.2% of all loans.

Greek lenders also have a significant share of their serviced loans portfolio (estimated at €8-9 billion) relying on state support programs (Gefyra 1 and 2); therefore, according to the supervisory authorities, the impact of the pandemic is not yet reflected in their fundamentals.

Banks estimate that the conditions set for the concession of state collateral ensure that those loans continue to have serviced status in the medium term. The prevailing sense is that these loans will not leave behind them the effects seen in the previous crisis, in the 2010s; this is because the commitments corporations and households have made, as provided for by the Gefyra 1 and 2 programs, force them to remain consistent in their obligations to service their debts for at least one year after the expiry of the subsidy they receive from the state. Otherwise, they will have to return to the state the subsidy they have benefited from and lose the advantage they enjoy from these programs.Nevertheless, given the persistence of the coronavirus pandemic, the possibility of at least a part of those loans turning bad cannot be ruled out, though that would constitute a step backward for banks. This risk could force them to make additional provisions within 2022, depending on the course of the pandemic and the economy, undermining the effort to keep the NPL rate in the single digits and to support earnings.

Original Story: Ekathimerini |EvgeniaTzortzi
Photo: Photo by Jonte Remos in FreeImages
Edition: Prime Yield