Millennium bcp 2022 profit jumps 50%

Portugal’s largest listed bank, Millennium bcp, posted a 50.3% jump in 2022 consolidated net profit, with interest rate hikes boosting the group’s core income, despite heavy losses at its Polish subsidiary.

The bank netted €207.5 million last year, up from €138 million in 2021. Profit in its domestic business more than doubled to €353.6 million.

Its Polish subsidiary, Bank Millennium (MILP.WA), said last month it reduced losses by 26% to €217 million in 2022, despite 525.6 million euros of costs related to legal risks over its portfolio of foreign currency mortgage loans.

“We are not afraid of the risks and what I’ve seen, quarter after quarter, is that Poland is an interesting market, the business has evolved very positively,” chief executive Miguel Maya told a news conference.

He said that, given the current uncertainty as a result of the war in Ukraine, legal risks in Poland and a much more fragmented world, “the priority is to strengthen capital ratios.”

“It is what we are doing,” he said, pointing out that the common equity Tier 1 ratio – ‘fully implemented’ – improved to 12.5% in December 2022, up from 11.7% a year earlier and “clearly above regulatory requirements.”

After years of record low rates putting pressure on lenders’ financial margins, Millennium bcp benefited in 2022 from interest rate hikes by the European Central Bank and the Polish central bank to control inflation.

Millennium bcp’s consolidated net interest income, or earnings on loans minus deposit costs, rose 35.3% to €2.15 billion in 2022. Its fees and commissions grew 6.1% to €771.9 million.

Its recurring core income grew by 44.4% to €1.86 billion, while its recurring operating costs increased only 3% to around €1 billion.

The bank also reduced total non-performing exposures by 19.4% to €2.22 billion in 2022 from a year earlier.

Original Story: Reuters |Sérgio Gonçalves
Photo: Millennium bcp website
Edition: Prime Yield

EBRD invests in Piraeus Bank’s synthetic securitization

The European Bank for Reconstruction and Development (EBRD) is providing €10 million in credit protection to Piraeus Bank SA, one of Greece’s four systemic banks and a long-standing partner of the EBRD. It is investing in the senior mezzanine tranche of a synthetic balance sheet securitisation of a €1.3 billion portfolio of performing SME (small and medium-sized enterprises) and corporate loans, originated by Piraeus Bank.

The transaction is expected to support Piraeus Bank in its efforts to further enhance its capital resilience by achieving a risk-weighted assets relief, and free up lending capacity to the real economy. Moreover, Piraeus Bank is committing 170% of the EBRD’s participation to finance new green investments in renewable energy and energy efficiency.

The transaction is the EBRD’s second investment in a synthetic securitisation by a Greek bank and, through its participation, the Bank aims to further support the development of the Greek synthetic securitisation market.

The transaction has been structured in such a way as to satisfy the requirements for significant risk transfer under the European Union’s Capital Requirements Regulation and to achieve simple, transparent and standardised eligibility (subject to all customary approvals), promoting transparency and higher transaction standards.

The EBRD started operating in Greece on a temporary basis in 2015 to support the country’s economic recovery. To date the Bank has invested more than €6.3 billion in over 100 projects Greece’s corporate, financial, energy and infrastructure sectors.

Original Story: EBRD News | Olga Aristeidou
Photo: Photo by Jonte Remos in FreeImages
Edition: Prime Yield

ECB reviews more than €150 billion in bank loans at risk of default

The supervisor detected risk management weaknesses in the European financial sector and launches a review to prepare banks for economic and geopolitical shocks.

The European Central Bank (ECB) has launched a joint action on European banks to review the portfolio of loans classified under special surveillance, according to financial sources close to the single supervisor. In Spain, the five large institutions (CaixaBank, Santander, BBVA, Sabadell and Bankinter) have a stock of almost 155,000 million euros in these loans.

The ECB is concerned about a sudden burst of non-performing loans (NPL) after a historic rise in interest rates and is trying to prepare the ground for banks. Loans under special surveillance, which fall into the stage 2 or phase 2 category, as it is known in financial jargon, are not non-performing, but the risk of default is considered to have grown significantly in recent months.

Official ECB sources point out that the review of loans at risk of default is part of a specific action under the IFRS9 accounting rules. This rule came into force four years ago and obliges banks to classify as doubtful credit loans unpaid for 90 days and to upgrade to ‘stage 2’ only those in which customers have delayed payment of instalments for one month.

At the end of 2022, according to the latest published accounts, Santander is the Spanish entity with the most loans under special surveillance: 69,100 million. These figures are group-wide and reflect the larger size of the group chaired by Ana Botín, which has more than one trillion in assets spread around the world. They represent 6.2% of its entire credit portfolio.

BBVA declares an exposure of 37,277 million in the group, 8.8%, and CaixaBank 30,616 million, almost 8% of the total. Sabadell has a stock of 14,337 million in loans under special surveillance, a weight of 8.4%, while Bankinter has just 2,851 million.

Fears of a sudden burst of delinquencies

The ‘campaign’, as the ECB calls this type of global action, has been going on since the beginning of the year due to fears of a sudden outbreak of non-performing loans. The supervisor, according to the sources consulted, expects a sudden rise in the default rate especially from 2024, when the increase in the price of money starts to have a greater effect on economic activity.

Pablo Hernández de Cos, governor of the Bank of Spain, warned that credit on special surveillance increased by 7% in the case of households last year. “We must not forget the existing risks, some of which have not yet materialised. Institutions must maintain a proactive attitude in risk measurement and in provisioning and capital policy,” the Bank of Spain governor urged.

The ECB has also been calling for months for banks to take a “prudent approach” to managing risks and bolstering provisions, or at least not to release the extra provisions for the pandemic. The head of supervision at the Eurobank, Andrea Enria, points in particular to the deterioration observed in the consumer loan portfolio, which is a thermometer of economic health. “The dynamics of distressed loans (stage 2 loans), whose average ratio increased slightly in 2022, should be closely monitored,” the Eurobank’s head of supervision said at the presentation of the institution’s supervisory priorities.

Bankers complain that rate rises will not only generate extra income, with the price of money at 3%, but will also have a negative side: they will lead to more non-performing loans. For the moment, the big banks have the default rate under control, with an average of around 3%, and the sector rules out a large increase in defaults at least this year.

Original Story: Vox Populi | Rubén Sampedro 
Photo: ECB main building
Edition and translation: Prime Yield

Americana’s scandal potential impact will be “insignificant”

Brazil’s central bank stated that the potential impact of the accounting scandal involving retailer Americanas SA on banks would be “insignificant” even in an extreme scenario.

Americanas filed for bankruptcy in January after disclosing “accounting inconsistencies” worth R$ 20 billion, leading banks to increase their provisioning in their most recent earnings release.

The central bank noted that the provisions stem from “a specific event related to a large company” and have already absorbed most of the materialization of the risk.

“The central bank estimated the remaining potential impact, plus a contagion scenario over the entire production and supply chain that depends on the company in a relevant way,” it said.

“In this extreme scenario, the impact on the consolidated financial system is insignificant and there would be no capital default in any financial institution,” it added.

The central bank also stated that “one-off events in large companies” generated a deterioration in asset prices in the private bond market, with increased volatility, spreads and risk aversion, in addition to impact on some lines in the credit market.

Its committee will continue to monitor developments and is ready to act in case of dysfunctionality, it said.

In addition to Lojas Americanas, energy company Light  disclosed earlier this year that it had hired a firm known for acting in bankruptcy protection, raising fears about it, which the company later denied.

The two incidents resulted in a flight of funds from credit funds. This occurred shortly after a new rule from the Brazilian securities industry regulator CVM began to take effect in January, implementing mark-to-market in fixed-income investments, which ended up helping to make the picture worse.

Original Story: Reuters |Marcela Ayres  
Photo: Getty images
Edition: Prime Yield

Caixa puts for sale more than €500 million in bad debt

Portugal’s State bank, Caixa Geral de Depósitos, hired KPMG to trigger the sale of a €500 million non-performing loans portfolio, including both secured and unsecured assets.

The package, which has not even been named, is composed of €100 million in secured credit (with collaterals) and another €400 million unsecured debt. According to the newspaper, the bank already named KPMG to look for potential buyers.

This process was launched while another operation – also with the support of KPMG – is on the way and about to be closed: the sale of the “Saturn” portfolio, valued at almost €600 million and for which CGD has received non-binding proposals from the investors like LX Partners, Cabot Financial and EOS Group. 

Though Caixa Geral de Depósitos (CGD) has one of the lowest NPL ratios in the Portuguese market, that does not prevent it from being the market’s biggest seller of problem asset portfolios.

Original Story: Jornal Económico | Maria Teixeira Alves 
Photo: Caixa Geral de Depósitos Headquarters
Edition and translation: Prime Yield

doValue sells Project Souq to Intrum

doValue announced the completion of Project Souq, the disposal to intrum of two non-performing loans (NPL) portfolios of approximately €630 million of aggregate gross book value related to the Cairo 1 and Cairo 2 HAPS securitization vehicles (both managed by doValue Greece).

Project Souq is one of the largest secondary sales of NPL portfolios in Europe and the first ever Greece secondary NPL transaction on the doLook platform, the digital trading platform which doValue has developed jointly with fintech company Debitos.

In a press release, the services says that “the transaction, which was structured, executed and completed by doValue Greece in volatile market conditions, allows doValue to accelerate the collection activity in Greece whilst retaining the long term servicing mandate on the two portfolios acquired by Intrum”.The process leading to the disposal was implemented also thanks to doLook, the digital NPL. Hellenic Finance acted as Financial Advisor for the sale process.

Original Story: doValue |Press Release 
Photo:Intrum website
Edition: Prime Yield

Bradesco prepares for rising bad loans in 2023

Brazilian lender set aside billions of reais in the fourth quarter, Chief Executive Officer Octavio de Lazari Jr. said.

The bank’s earnings were hit hard in the final quarter of last year by the provisions, including for its lending to failing retailers Americanas SA. The bank said that its net income for the period fell to €1.4 billion reais (R$), from R$3.2 billion a year earlier.

Bradesco has the largest exposure in terms of total lending to Americanas, which was granted protection from creditors in January, at about R$4.8 billion. The bank set aside R$ 14.9 billion in the fourth quarter to cover bad loans, up from R$ 4.3 billion a year earlier. The bank said it had provisioned for 100% of an operation involving a large corporate client.

Americanas is a one-off case and its situation doesn’t apply to other big companies in Bradesco’s credit portfolio, Mr. de Lazari said. Instead, the bank expects its loan delinquency ratio to continue to rise in the first part of this year, from 4.3% at the end of the fourth quarter, mostly because of its low-income individual and small- and micro-business segments, Mr. de Lazari said.

After boosting provisions in the fourth quarter, the bank expects to set aside between R$ 36.5 billion and R$39.5 billion this year for bad loans, leaving the bank with sufficient funds to handle the expected increase in delinquency, according to the CEO.

“We have adequate provisions. It’s not something that worries us,” Mr. de Lazari said.

With the provisions in the fourth quarter, including the money set aside for the large corporate client, the bank’s results in 2023 should be affected more by other clients in its portfolio and not by the retailer, said Renan Manda and Matheus Guimarães, analysts for XP Investimentos, in a research note.

“Its exposure to Americanas is now fully provisioned, thus eliminating potential impacts from this case in 2023,” the XP Investimentos analysts said.

Original Story: Market Watch | Jeffrey T. Lewis
Photo: Bradesco caption site
Edition: Prime Yield

Banks see an upturn in NPL by the end of the year but are confident employment will hold up

Doubts about the economic evolution in the coming months are clouding all kinds of forecasts. Despite the uncertainty, banks are trying to anticipate and see a possible upturn in non-performing loans (NPL) at the end of the year. However, they are confident that the resilience of employment, as well as the performance of activity, so far better than expected, will clear up any hint of default.

For the moment, bankers’ concerns are at a minimum, in line with the default rate itself. So, at least, they have made it clear these days during the III Finance Observatory organised by EL ESPAÑOL-Invertia.

Remaining at minimum for months – with the latest data available from the Bank of Spain, the default closed 2022 at 3.54%, the lowest level since December 2008 – the level of defaults does not worry the banks too much, neither in the case of companies nor in that of individuals. “So far we are not seeing a problem in NPLs. It remains at minimum levels both in Spain and in Europe”, explained Alejandra Kindelán, president of the Spanish Banking Association (AEB) at this forum.

Behind this evolution lies, in her opinion, the fact that the economy has not slowed down as much as expected (it should be remembered that some months ago recession was taken for granted), as well as the fact that employment “is holding up very well”.

Moreover, says Kindelán, “banks’ management of NPL and credit portfolios is very responsible and much more proactive now. They have learned a lot from the previous crisis”.

That said, the banks do see the possibility of an upturn in NPL in a few months’ time, especially as a result of the poor digestion that certain companies will make of the increase in costs due to high inflation, which in the euro area still stands at 8.6%, as well as the impact that the rise in interest rates may have on activity.

Future upturn

“The main purpose of the interest rate hike is to curb inflation and it does so by cooling the economy. This cooling will also have an impact on the sector, on the volume of assets in the sector, and potentially on non-performing loans,” said Kindelán.

A view shared by Santander Spain. Ángel Rivera, CEO of the group’s domestic subsidiary, pointed out at the same forum that for the moment there is no worrying delinquency rate, which is also helped by the fact that many families have a good savings cushion, to which they contributed a lot during the pandemic.

“At the end of the year the situation will probably get a little worse,” he warned, however, as the moderation in demand for credit, which is already being felt, together with high inflation, will mean that “the tension” will be “greater” then. “We will see a rise in NPL,” he pointed out, although he referred to the third and fourth quarters to see the evolution of the effect of the measures taken by the central banks.For his part, Carlos Ventura, general manager of Sabadell, pointed out that “it would be reasonable to expect that some sectors or companies will not be able to pass on inflation in the same way, especially in energy, and this will generate somewhat more NPL in these niches than would be reasonable”. “We expect [delinquencies] to be moderate,” he added.

Original Story: El Español | Elena Lozano 
Photo: Banco de España
Edition and translation: Prime Yield

Portuguese banks well placed to absorb rise in impaired loans, says Fitch

Portuguese banks are generally well positioned at their rating level to withstand a likely increase in impaired loans in 2023 resulting from the economic slowdown, high inflation and rising interest rates, Fitch Ratings says.

“We expect the sector’s impaired loans ratio to increase only modestly, partly due to tighter underwriting guidelines introduced in 2018. Moreover, banks have improved their ability to absorb impaired loans through write-offs and sales in recent years by developing in-house loans restructuring teams. Profitability will benefit from higher interest rates, supporting capacity to absorb higher loan impairment charges”, the rating agency states in a release.

Most major Portuguese banks are entering the economic downturn from more favourable positions than before the pandemic due to the active management of legacy impaired loans (cures, granular sales and write-offs) and Portugal’s swift post-pandemic recovery, the analysts conclude. The sector impaired loans ratio was about 3.4% at end-June 2022, according to Banco de Portugal, compared with a peak of about 18% at end-June 2016.

“Nevertheless, high household indebtedness and a large proportion of variable-rate loans pose a risk to asset quality as interest rates rise. The risk is mitigated by the Bank of Portugal’s 2018 macroprudential recommendations. These set more conservative guidelines for the underwriting of new lending to households, including limits on loan-to-value (LTV) ratios and stress-testing customers’ repayment capacity under a 300bp interest rate rise”, says the same document.

The guidelines quickly led to the near elimination of new residential mortgage lending with LTV ratios above 90%.

By end-2021, 92% of residential mortgages had an LTV ratio of below 80%, which should limit credit losses for banks if home prices fall moderately. Mortgages originated before the 2018 guidelines took effect should not pose a significant risk. Lending volumes before 2018 were low as Portugal was still recovering from the eurozone sovereign debt crisis and private-sector deleveraging. In addition, the loans were originated when interest rates were higher and their LTVs have since reduced.

“Fitch expects banks to closely monitor borrowers’ repayment capacity and to implement early restructuring of loans, consistent with government measures approved in late 2022 to mitigate the impact of rising interest rates on vulnerable borrowers. This should help to prevent a significant rise in Stage 3 loans”.

In the meanwhile, Portuguese banks are well positioned to benefit from rising interest rates. “The positive effects were already evident in 3Q22 and 4Q22 results, and we expect an acceleration in 2023. Most of the banks’ loans are variable-rate, including 90% of residential mortgage loans, and most of their funding is deposits that will reprice more slowly than assets. Pre-impairment profits should also be supported by the reduction of branch networks and cost-saving initiatives in recent years, partly offsetting the impact of inflation on operating costs”, stress these specialists. 

Original Story: Fitch Wire | Press-Release
Photo: BPI Facebook
Edition: Prime Yield

Cooperative banks’ concentration process in full progress

The consolidation plan of the cooperative banks is in full progress, following the revoking of the license of Olympus Cooperative Bank and the transfer of the deposits it held to National Bank of Greece.

The Bank of Greece announced that the revocation of the operating license was because the cooperative lender “did not have the minimum equity capital required nor did it manage to raise the required funds after the impractical expiry of the deadline it had been given.” Olympus Cooperative was the result of the absorption of the Cooperative Bank of Evros by the Cooperative Bank of Drama.

The decision is part of the wider strategy for the concentration of cooperative banks, through moves such as the absorption of the Cooperative Bank of Central Macedonia by Pancreta Bank, which is expected to be completed by the end of September this year. It was preceded by Pancreta’s share capital increase of €98.7 million with the entry of Thrivest Holdings.

Kathimerini understands that the consolidation drive being launched includes the share capital increase planned by the Cooperative Bank of Epirus, while the issue of the Hania Cooperative Bank remains open – after the collapse of talks with Pancreta – without currently facing any direct capital aid problems.

After these moves, the sector of cooperative banks has shrunk significantly and now has only four banks, i.e. the Karditsa Cooperative Bank, which is also the healthiest cooperative with a nonperforming loan ratio of 17% and a total capital adequacy ratio of 21% (based on of 2021), the Cooperative Bank of Epirus (with assets of €287 million and a capital adequacy ratio of 16%), the Cooperative Bank of Thessaly (with assets of €302 million and a capital adequacy ratio of 13.8%) and that of Hania, which is the largest cooperative with assets of €680 million, loans of €487 million, an NPL ratio of 48% and total capital adequacy ratio of 13% (2021 data).

As far as the Olympus Cooperative Bank is concerned, the deposits amounting to €80-85 million are being transferred to NBG and according to the announcement by the systemic lender, “they are fully guaranteed.”

Original Story: Kathimerini | Evegenia Tzortzi
Photo: Heafquarters Bank of Greece
Edition: Prime Yield

Bank lending down for the first time in a year

Outstanding loans in Brazil decreased by 0.3% in January, according to the latest central bank data, marking the first decline in a year.

The result suggests a slowdown that is likely to gain momentum in a scenario of high borrowing costs following the aggressive monetary tightening implemented by the central bank to curb inflation.

Outstanding loans fell to $R 5.3 trillion in January, with loans to companies decreasing by 2.4%, while credit to families rose by 1.1%.

Bank loans in Latin America’s largest economy have decelerated amid more expensive credit, as the country’s benchmark interest rate stands at 13.75% from a record low of 2% in March 2021.

This has prompted constant criticism from the new leftist President Luiz Inacio Lula da Silva and his political allies, who see the level of interest rates as unjustifiable given slowing inflation, which reached 5.63% in Mid-February.

The central bank has left interest rates unchanged since September, but data from the central bank shows that average interest rates on non-earmarked loans have increased to 43.5% per year from 41.7% in December.´Bank lending spreads also grew from 28.7 points the month before to 30.6 percentage points, while a broad measure of Brazilian consumer and business default ratios increased to 4.5% from 4.2% in December.

Original Story: Reuters | Marcela Ayres 
Photo: Photo by Bruno Neves in FreeImages
Edition: Prime Yield

Household debt: consumer credit rebounds faster in Spain than in the euro zone

The slowdown in mortgages can be seen in the volume of credit granted to families. Against the general trend, there is an indicator that does grow: consumer credit. This section increased by 3.9% in January of this year if compared with the figures for 2022. The rise is also noticeable in Europe, but the Spanish rebound is 25% above what grows in the average for the area of the euro. The combination of inflation, a weaker household structure and a higher number of variable-rate mortgages are behind the data.

In the first month of the year, consumer loans to households represented €95,651 million, which represents an increase of 3.9% compared to the data from a year ago when they stood at €92,046 million. Between the two numbers, the picture has changed drastically with the start of the war in Ukraine and runaway inflation that led the European Central Bank to make a quick turnaround on interest rate policy.

In the presentation of Caixabank’s results, its executives pointed out that they expected a “slight” fall in consumer credit. It should be borne in mind that Caixabank is the leader in the retail segment in Spain. Sabadell, for its part, considered that it could increase its market share in this consumer segment.  

The focus in this type of loans is now on delinquency, which for the moment seems to be contained. The latest data published by the Bank of Spain show that this indicator continued its downward trend, standing at 3.54% at the end of the year, its lowest level since December 2008. Compared with the general indicator, consumer credit delinquency fell to 5.93%.  

Less disposable income

There are several reasons that point to the increase in consumer credit in Spain compared to other European countries. The rise in inflation, although it is true that it affects the whole of Europe, is more noticeable in a market where the economic structure of the family is weaker, say the experts consulted.  

Another factor that may support this upturn is that the Spanish mortgage market is more heavily weighted towards variable-rate loans than in other countries, although in recent years there has been a change in the trend in mortgages granted by banks. In Spain, and in general in southern Europe, there are more variable rate mortgages.  

The sharp rise in the Euribor in recent months, to close February at 3.54%, has also led to mortgage repayments rising, leaving households with less disposable income. 

In any case, the situation could turn around in the coming months. The latest surveys by the Bank of Spain pointed to a rise in the cost of credit and a closing of the tap on the part of the entities, and the banks already pointed out in their results presentations that they expected a slowdown in mortgages in 2023. However, they noted that consumer credit was one of the segments that could experience a less harsh start to the year.

Original Story: Economia Digital | Marta Garijo 
Photo: Photo by Pablo Rodríguez in FreeImages
Edition and translation: Prime Yield

Loss of purchasing power slows down mortgages and consumer credit

Housing loans stood at €510.422 billion in January, 2.844 billion less than the previous month, according to the Bank of Spain.

The hole that inflation has left in consumers’ pockets was reflected in January in a notable drop in housing and consumer loans to Spanish families. The loss of purchasing power has become one of the biggest challenges for banks, which have begun to be more punctilious when granting loans which, moreover, have become more expensive in the heat of the rise in interest rates of the European Central Bank (ECB).

The aim is to keep non-performing loans (NPL) at bay, having managed to keep them below 3.5% on average despite the economic difficulties resulting from the energy and price crises. So, the requirements for accessing a loan are getting higher and higher. And the profile of the applicant is increasingly scrutinised.

According to data published on Wednesday by the Bank of Spain, housing loans stood at €510,422 million in January, which implies 2,844 million less than the previous month and 4,180 million less than a year ago, after seven consecutive months of declines.

These falls are associated with the slowdown in housing sales, given the sharp rise in the Euribor, which closed February at 3.52%, increasing the price of variable rate mortgages already signed and also new loans in the sector. A rise in prices that is slowing down the purchasing decisions of future homeowners.

Figures from the Bank of Spain indicate that the amount that households spend on housing still accounts for the largest part of all their debts, approaching 73.5% of the total.

Fall in consumption

Loans for accessing a home have not been the only ones to notice a certain slowdown at the start of the new year. Data from the Bank of Spain indicate that household consumer loans fell in January to €95,651 million, down from €96,687 million the previous month.

The figure, however, is still higher than the €92,046 million a year ago, showing that Spaniards have had to resort to this type of loan more forcefully in recent months to meet their expenses.

On the other hand, household borrowing for other purposes amounted to €86.32 billion, down from 89.03 billion a year earlier and around the same figure as the previous month (86.18 billion).

Original Story: El Correo |Clara Alba
Photo by Svilen Milev in FreeImages
Edition and translation: Prime Yield

Number of foreigners seeking bank loans rising

In total credit granted in Portugal in 2022, 11.4% of the amount went to people of foreign nationality (up from 9.36% in 2021).

The proportion of foreign people in the credit granted by banks grew between 2021 and 2022, representing more than 16% of credit granted to people between 41 and 50 years old and 45% to people over 61 years old, according to the Bank of Portugal.

In total credit granted in Portugal in 2022, 11.4% of the amount went to people of foreign nationality (up from 9.36% in 2021).

Among customers of foreign nationality who obtained credit, most went to people with a nationality of Brazil (25%) and the United Kingdom (10%), similar figures to 2021.

In home loans alone, foreign nationals accounted for 14% of the total amount borrowed in 2022 (up from 10.81% in 2021).

The leading nationalities were Brazil (20% in 2022 and 21% in 2021) and the United Kingdom (12% and 13%, respectively).

In 2022, nationals from the United States came in third place (9%), followed by those from France (8%) and Angola (7%).

There is also a noticeable increase in the weight of loans to foreigners as the age bracket rises.

In 2022, foreigners represented only 6.77% of mortgage loans to people aged 18 to 30, but 11.8% of loans to people aged 31 to 40.

In the 41 to 50 age group, foreigners obtained 16.4% of total mortgage credit and in the 51 to 60 age group the proportion was 27.8%. Over the age of 61, 45% of all mortgages went to foreigners in 2022.

Original Story: Portugal Global | News 
Photo: Big stock photo
Edition: Prime Yield

Greek banks profitable after seven years

The first clear signs of recovery in the banking system and its return to healthy organic profitability have emerged from the results for 2022, which will be the first profitable year after the last recapitalization of Greece’s lenders, according to Kathimerini news.

Pending the announcements by the three systemic banks – Alpha, National and Eurobank – of the annual results for 2022 and the positive results announced by Piraeus Bank, the profitability target is being achieved after seven consecutive years of losses. Those losses of the four systemic banks totaled €18.2 billion, as a consequence of the high provisions they had to take in over the previous years to cover bad loans.

However, the full armoring of the banking system, which is called upon to further strengthen its capital by at least 150 basis points (b.p.) in order to reach the European average, has not been completed yet and, as has been pointed out by the most official source – the head of the Single Supervisory Mechanism’s supervisory board Andrea Enria in a recent interview with Kathimerini – the only way forward is to consolidate profitability.

Kathimerini understands the consolidation since 2016 has required accumulated provisions of more than €30 billion and, apart from a short break in 2019, has led to total losses of €9.5 billion in the 2016-2021 period (€18.2 billion since 2015) – which remain on the banks’ balance sheets and are offset against profits for the year.

Only recently did the four systemic banks in total record losses of €1.7 billion and €4.7 billion for the years 2020 and 2021 respectively, so that the cumulative result of the last three years remains strongly negative – over €3 billion – despite the positive 2022 result.

Estimates for 2022 raise profitability to €3.5 billion, but given that this result is also based on extraordinary gains, such as the sale of the card management division that brought in total revenues of €1.2 billion (before taxes for all four systemic banks), but also in significant non-recurring financial income, real profitability remains a key pursuit.

Original Story: Kathimerini | Evegenia Tzortzi 
Photo: Site Alpha Bank
Edition: Prime Yield