Banks reduce NPL stock by €1.3 billion in 2023

Spanish banks reduced their portfolio of nonperforming loans (NPL) (NPL) by 1.291 billion euros in 2023, although the NPL remained unchanged at 3.54% due to the fall in the total stock of credit, which was 38.208 billion euros, according to data from the Bank of Spain consulted by Europa Press.

Specifically, the NPL ratio was 3.54% in December, three basis points lower than the 3.57% recorded in November. With respect to December 2022 there has been no change. The annual maximum in 2023 was recorded in October (3.60%), while the minimums were in June and July (3.50% in both cases).

Thus, the total stock of doubtful loans was 41.868 billion euros in December, 1.291 billion less than the 43.159 billion in December 2022. Compared with November, the fall was 549 million euros.

On the other hand, during 2023, the total balance of credit granted contracted by 38.208 billion euros at a year-on-year rate, standing at 1.181 trillion euros. Compared with November, the total credit balance decreased by 5.22 billion euros.

The data broken down by type of institution show that the NPL ratio of deposit institutions as a whole (banks, savings banks and cooperatives) closed 2023 at 3.44%, one basis point lower than in November and also than in December 2022. During the year, these institutions reduced their doubtful assets portfolio by 1.508 billion euros, to 38.768 billion euros.

The NPL ratio of financial credit institutions contracted to 6.33% in the last month of the year, up from 6.97% in October and above the 5.93% of a year earlier. In 2023, this type of institution recorded a rise in doubtful assets of 216 million euros, to a total of 2.908 billion.

According to data from the Bank of Spain, provisions for all credit institutions fell to 29.870 billion euros in December, a decrease of 379 million compared with November (1.25%). Compared with a year earlier, they fell by 1.198 million euros (-3.85%).

Original Story: Bolsamania | Author: Europa Press
Translation and edition: Prime Yield

Greece likely to sell Piraeus Bank stake in early March

Greece’s bank bailout fund is likely to sell its entire 27% stake in Piraeus Bank  in early March, a source close to the process told Reuters.

It will be the fourth such sale since October by the Hellenic Financial Stability Fund (HFSF) that was set up to recapitalise Greek banks during the country’s decade-long financial crisis from 2008-2018.

“There is strong interest from many foreign investors,” a second source with knowledge of the matter told Reuters.

Piraeus, Greece’s third-largest lender, has a market value of 4.9 billion euros, which means that state-controlled HFSF could sell its stake for more than a billion euros.

Having injected about 50 billion euros into the sector, HFSF began reducing its holdings in four major Greek banks last autumn.

It sold a 20% stake in National Bank NBGr.AT and 9.4% of Alpha Bank in November and a smaller stake in Eurobank in October.

Original Story: Reuters / Nasdaq
Author: Renee Maltezou
Photo: Reuters

BBVA sells a €500 million NPL portfolio

BBVA has announced the sale of a portfolio of unsecured non-performing loans (NPL). This portfolio has an approximate gross value of €500 million. The sale will have a positive impact on the bank’s NPL ratio in Spain.

BBVA reached an agreement to transfer a portfolio of unsecured unpaid loans (known as the ‘Nairobi Project’), with an approximate gross value of €500 million. This operation is part of BBVA’s strategy for value creation and balance sheet management with capital optimization. It will have a positive impact on the bank’s NPL ratio in Spain.

The sale of the portfolio has been divided into two segments. The first segment was sold to the KRUK group. The second has been transferred to a subsidiary of Cerberus Capital Management, L.P. (‘Cerberus’). GCBE, formerly Gescobro, will manage the portfolio for Cerberus.

Edition: Prime Yield
Original Story: BBVA Press

Bank of Greece to set mortgage caps

The Bank of Greece, in cooperation with lenders, intends to set limits on mortgage amounts in relation to the commercial value of the property and the monthly instalment to be paid by new borrowers.

The limits will be more flexible for first-time buyers – those taking out a mortgage for the first time to buy a property – with the aim of making it easier for them to buy a property on credit.

According to Ekathimerini’s sources, the new limits for the housing market concern the amount of the loan that can be obtained, which cannot exceed 80% of the commercial value of the property, or 90% if it is a new buyer; and the instalments of the loan cannot exceed 40% of the disposable income, or 50% if it is a new buyer.

According to bank sources, the proposed measures will allow 10% of the total number of loans to be approved each year to exceed the above limits, provided that this is justified by the profile and financial situation of the prospective borrower.

The setting of limits on bank lending to the housing market is a measure used in most European countries and is expected to be introduced for the first time in this country.

Limiting the amount of the loan in relation to the value of the property will act as a buffer against a fall in commercial property prices that would jeopardise these loans, while the limit in relation to the average household’s cost of meeting housing needs will prevent over-borrowing.

The new limits will be “imposed” by a Bank of Greece decision to be issued in mid-March, and will be implemented from the beginning of 2025 to allow for the necessary adjustment by banks.

The measure will not overturn the lending policies of banks, which already apply similar rules to new loans they grant. According to disbursement data for 2023, 94% of the loans granted were for less than 80% of the value of the property.

Original Story: Ekathimerini |Author: Evgenia Tzortzi
Edition: Prime Yield

Large banks exceeded €70 billion in bad loans in 2023

The large Ibex 35 banks will have €70.978 billion in non-performing loans (NPL) at the end of 2023, 2.3% more than in 2022 and an average NPL ratio of 2.99%, according to the accounts published in recent weeks and consulted by Europa Press.

Thus, the average NPL ratio of the institutions (Santander, BBVA, CaixaBank, Sabadell, Bankinter and Unicaja) is 2.99%, slightly below the NPL ratio compiled by the Bank of Spain, which stood at 3.45% in November. However, it should be noted that the data collected includes the international business of these banks and that the situation varies from one bank to another.

If we also take into account special monitoring loans, the main Spanish banks ended 2023 with a portfolio of problem assets of 241,872,000 loans and advances to customers. €241.872 billion euros, 7.4% more than in 2022.

Original Story: Europa Press
Edition and translation: Prime Yield

Real estate and NPLs lead FDI in 2023

The leading position of real estate in foreign direct investment (FDI) in Greece is maintained and even strengthened in 2023, as the figures show, maintaining the reflection on whether and how the country’s production model will eventually be able to change.

FDI has “resurged” in recent years, rising from just €249 million in the fateful year of 2010 to a record €7.9 billion in 2022. However, foreign investors prefer to invest mainly in tourism and real estate, rather than in industry or the creation of new production units from scratch, so-called greenfield investments.

In 2023, Bank of Greece data show that while total FDI fell short of the 2022 record, real estate investment surged. In January-September, FDI reached €3.9 billion, a far cry from the €7.9 billion for the whole of 2022. In contrast, real estate investment reached €1.6 billion compared to €1.2 billion in January-September 2022, an increase of 30%. Overall, FDI in real estate in 2022 will amount to around €2 bn, i.e. 25% of the total.

The tightening of Golden Visa requirements certainly contributed to this jump in 2023, with many foreign buyers rushing to secure a Golden Visa before the new measures took effect.

In addition, analysts note that investments in financial activities, as shown by the Central Bank’s data, amounting to €2.4 billion in 2022 (there are no figures yet for 2023), are also to some extent indirectly related to real estate. This is because this category includes the funds placed for the purchase of non-performing loans from funds.

Moreover, data on gross fixed capital formation (as derived from GDP) from the Hellenic Statistical Authority show that investment in residential construction in January-September rose to 14.7% of the total (€3.2 billion), up from 10.7% of the total in the same period of 2022. This percentage is, of course, far below the 42% of investment that residential construction represented in 2007. It is also very low compared to the corresponding 27.9% in the euro area.

Original Story: Ekathimerini | Author: Eirini Chrysolora

Edition: Prime Yield

Three investors in the race to buy DoValue Portugal

The Italians from DoValue are leaving the Portuguese bad debt market and have three investors looking to buy the management company, which has €500 million in assets under management.

In addition to LX Partners’ €4 billion deal, another operation is underway in the Portuguese distressed debt market. The Italian group DoValue, controlled by Fortress and Bain, has already selected the three candidates to submit binding offers for its non-performing loans(NPL)  and real estate management business in Portugal, which has €500 million in assets under management.

ECO understands that a shortlist of three candidates has already been selected, who will have to submit binding offers in the coming weeks. DoValue will then select the investor with whom it will enter into exclusive negotiations to reach a final agreement.

This follows a phase in which more than a dozen investors expressed interest in the transaction. According to DoValue Portugal, one of the reasons for the investors’ interest is related to the restructuring process that began a year ago “to transform the company into a boutique servicer, focusing on various strategic services for the regularisation and management of complex assets”. “In this context, we have acquired new clients, also with a strategic role, thus accumulating a wide and relevant experience for this specialisation,” the company said.

To date, DoValue Portugal’s activity has mainly involved the management of problematic assets, including a portfolio of real estate and NPL from Oitante (initially worth €1.5 billion, but now with a higher residual value) and a portfolio of NPL from Davidson Kempner. Although the final results for last year are not yet known, it had a turnover of €3.8 million by September. In 2022, it made a loss of almost €3 million after revenues of 7.1 million – compared to revenues of €21 million in 2019.

The Italians of DoValue entered the Portuguese market in 2019 with the acquisition of Altamira Portugal, which two years earlier had bought the business unit responsible for managing the real estate assets and credit portfolio of Oitante – the vehicle created to hold the assets of the former Banif that Santander didn’t want to buy. In 2021, Altamira Portugal was renamed DoValue Portugal.

Listed on the Milan stock exchange, DoValue claims to be the largest servicer in southern Europe. The group is controlled by Fortress and Bain, which own more than 40 per cent of the company.

Original Story: ECO | Author: Alberto Teixeira
Edition and translation: Prime Yield

Spain’s 2023 mortgage stock at 18-year low

Specifically, the Spanish mortgage stock stood at 494,986 million euros in December, a decrease of 3.1% compared to December 2022 and a decrease of 0.3% compared to the previous month.

Since July, the stock of mortgages has been below half a trillion euros, which in itself is the lowest level since May 2006. If only the year-end figures are taken into account, the Spanish mortgage stock has fallen to the level of 2005.

New operations amounted to 5,128 million euros in December, which means that they closed 2023 with a total of 56,242 million euros. This is a high figure from a historical point of view, as in the last ten years it has only been exceeded in two years: 2021, with 59,425 million euros, and 2022, with 65,220 million euros.

Of the total new operations signed in 2023, 4,728 million euros correspond to mortgage renegotiations. Spanish households have not renegotiated such a large volume of mortgages since 2016, when mortgage loans worth 6,396 million euros were renegotiated.

The new credit granted in 2023 means that the total volume of mortgage repayments, both planned and early, was 72,239 million euros.

In terms of interest rates, new mortgages signed in December were at an average interest rate (NDER) of 3.74%, a fall of five basis points and the best figure since May this year. However, this is significantly higher than in December 2022, when mortgages were signed at an average rate of 2.91%.

Despite this, portfolio repricing has caused the weighted average interest rate on Spanish mortgages outstanding to rise by three basis points to 4.64%, the highest level since July 2009.

Original Story: Press Digital | Author: Agencias

Translation and edition: Prime Yield

Photo: Big Stock

Household delinquency in Brazil at 22-month low

Default rates are at their lowest level in 22 months. This is indicated by a monthly survey carried out by the National Confederation of Trade in Goods, Services and Tourism (CNC). The percentage of households in arrears closed January at 28.3%, the lowest level since March 2022.

And defaults fell more among lower-income families. The survey registered a drop of more than 3 percentage points year-on-year; 35% of families with an income of up to 3 minimum wages are in default. Despite finding it more difficult to pay, almost 30% of these consumers believe they are little in debt.

Felipe Tavares, CNC’s chief economist, believes that the figures show a positive scenario for lower-income families in 2024.

With regard to debt, 78% of families reported having debts due in January, an increase of 0.5 percentage points compared to December.

Original Story: Agência Brasil | Author: Fabiana Sampaio
Edition and translation: Prime Yield

Alantra Offices

Alantra partners with Spanish family office Ion Ion

Financial services firm Alantra, which was launched in Spain as N+1 in 2001, has partnered with Spanish family office Ion Ion to support the growth of its European private debt platform, which includes real estate debt funds.

 Ion Ion, a leading family office in Spain, is controlled by Jon Riberas, the owner of Spanish automotive company Gestamp. The firm will acquire a strategic equity stake in the Spanish manager’s private debt business by way of a capital increase. Alantra said the deal will boost its financial resources for its expansion across Europe.

As part of the deal, the family office will seed existing and future private debt vehicles including its second real estate debt fund, Alteralia Real Estate Debt II fund. Speaking to Real Estate Capital Europe, Jaime Cano, partner in Alantra’s private debt business, said the outfit has been placed in a holding company under Ion Ion.

This week’s announcement follows the news Alantra has launched Alteralia Real Estate Debt II, targeting €200 million in equity commitments. Cano added the firm will begin fundraising for the fund in the second quarter of the year. It is aiming to hold a first close in Q3 with the aim of raising between €80 million to €100 million, including an unconfirmed volume of capital from Ion Ion.

 “Real estate debt is one of the pillars to further grow the private debt platform in Europe, alongside other debt strategies. We are aiming to become one of the leading GPs in the European mid-market space, ” Cano said. “We also aspire to attract large and international LPs/investors to our multi-credit platform with the goal of increasing the assets under management in the short and medium term, ” he added.

 “Given the current market conditions, our target net return for real estate debt is within the low teens. Additionally, we are exploring more opportunistic real estate debt transactions through our Credit Opportunities fund, where the target returns are in the mid-teens.”

Through the second fund, the firm will have a Western European focus and will aim to diversify its exposure – which is largely focused on Spain. It will provide loans for acquiring real estate assets, refinancing existing debt, or funding renovation or repositioning works. Ticket sizes will range between €10 million and €30 million, with loan-to-values up to 80 percent.

As well as real estate debt, Alantra’s private debt platform invests in corporate direct lending and midmarket credit opportunities.

Original Story: Real Estate Capital Europe
Author: Mark Mwaungulu
Edition: Prime Yield
Photo: Alantra

Greece debt

Greeks’ overdue debt outsize GDP

The overdue debt owed by Greeks to the state and financial institutions – i.e. banks and funds – is more than the country’s gross domestic product, reaching 224.2 billion euros.

These debts are divided between public and private sector entities as follows: €105 billion is owed to the tax authorities, accounting for 47%; €46 billion to social security bodies, representing 21%; €11.7 billion to banks, representing 5%; and €61 billion to funds managed by servicers, an amount that represents 27% of the total overdue private debt.

This amount, which exceeds Greece’s GDP, does not include the current debt of businesses and households, which amounts to €113.2 billion, raising the total amount of debts to €337.4 billion.

The out-of-court mechanism is a key tool for settling overdue debt, and according to data from the General Secretariat for Private Debt Management, 12,025 arrangements had been made for debts to financial institutions and the public for a total of €4.36 billion in initial debts until December 2023.

Last year, successful arrangements and new application submissions reached record numbers, a fact that, according to the Ministry of National Economy, reflects the dynamism of this particular tool that is significantly used by debtors and contributes substantially to the management and reduction of private debt. From the report of the last six months, it stems that an average of 950 arrangements per month are provided through the tool, while the continuous interest is also reflected by the rate of launching new applications on the platform, which exceed 3,500 every month.

Based on the latest progress report for December 2023, €18 billion in debt is on track for settlement. Most applications concern citizens with debts in the range of €50,000-200,000. From the analysis of the arrangements, it appears that 45% of the arrangements for debts to financial institutions receive a haircut of more than 30%, while for debts to the state, the corresponding rate of applications that receive a haircut of more than 30% is 33%. 

Original Story: Ekathimerini

Author: Evgenia Tzortzi

Edition: Prime Yield

Photo: Getty Images