NPL&REO News

Hatzidakis threatens banks with intervention unless they lower fees

28 June, 2024

The government has threatened banks with state intervention unless they reduce the fees they charge clients for various banking activities.

Speaking at the annual general assembly of the Hellenic Banks Association, Minister of National Economy and Finance Kostis Hatzidakis pointed out that the non-settlement of the issue of bank commissions helps neither the banks, nor the government, nor the society.

He went on to call on Greek banks to adopt fairer systems based on the practices of other European banks or businesses with large client networks in Greece, so that a government legislative intervention is not needed.

The minister also announced a small quantitative expansion of the “Hercules” program of nonperforming loans’ securitization, with the aim of further reducing bad loans.

He further spoke of a small time extension for the inclusion of self-employed and freelance professionals in the IRIS system, who have been notified by the tax administration (AADE) about their delay, given that the period of implementation of the measure coincided with the interconnection of cash registers with POS.

Credit sector priorities

Hatzidakis presented five priorities for the banking sector. They are: Supporting the sector continuously and with all available competition tools (referring specifically to the fifth systemic bank to be created through the absorption of Pancreta by Attica Bank); the settlement of all outstanding issues in relation to the “Hercules” program; stronger support for the real economy and especially for small and medium enterprises; further strengthening of transparency and fairness in commissions; and rapid expansion of the IRIS direct payment system.

However, Hatzidakis underlined that the next step will be the extension of direct payments to all businesses and to the entire range of transactions, both in e-commerce and in stores, by March 2025.

“The government wants a robust banking system that acts as a driver of economic growth. However we also want a banking system with competition between banks. A banking system that will provide attractive returns to savers and liquidity to businesses and households,” noted the minister.

Original Story: Ekathimerini
Edition: Prime Yield

Default reached 68.76 million consumers in Brazil in May

27 June, 2024

The total number of defaulters in Brazil remained at 68.76 million in May, repeating April’s result – the highest in the survey’s historical series. This figure represents 41.79 per cent of adult Brazilians. Compared to the same month last year, the percentage of defaulters in Brazil fell slightly by 0.04 per cent. The data comes from the National Confederation of Shopkeepers (CNDL) and the Credit Protection Service (SPC Brasil).

“Unforeseen circumstances, a reduction in income and a lack of control over the budget are major reasons for default and the priority ends up being to pay those bills that have had their services cut off, such as internet, telephone, water and electricity,” says CNDL president José César da Costa.

The survey, based on information from the capitals and inland cities of all 26 Brazilian states, as well as the Federal District, shows that people aged between 30 and 39 account for the largest proportion of debtors, at 23.69 per cent. As for the gender of defaulters, women account for 51.14 per cent and men 48.86 per cent.

When all outstanding debts are added together, the average debt of defaulters is R$4,445.19. According to the data, each negative consumer owed an average of 2.10 creditor companies. The figures also show that almost three out of every ten consumers (30.70 per cent) had debts of up to R$500, a percentage that rises to 44.72 per cent when it comes to amounts of up to R$1,000.

Original Story: Mercado e Consumo | Data: 19.06.2024
Edition and translation: Prime Yield

BBVA sells €270 million portfolio of NPL

25 June, 2024

BBVA has completed the sale of a portfolio of unsecured non-performing loans valued at approximately €270 million. This transaction is expected to positively impact the bank’s non-performing loan (NPL) ratio in Spain, which was 4.11 percent at the close of the first quarter of 2024.

BBVA has finalized an agreement to transfer a portfolio of unsecured non-performing loans, known as the ‘Estoril Project,’ with a gross value of approximately €270 million. This transaction aligns with BBVA’s strategy for value creation and capital-optimized balance sheet management, and it will positively affect the bank’s NPL ratio in Spain. The portfolio has been sold to AXACTOR.

In 2022, BBVA sold a similar portfolio in Spain, known as ‘Neila,’ with a gross value of approximately €730 million. In 2023, BBVA sold another NPL portfolio, named ‘Nairobi,’ with a gross value of close to €500 million.

Original Story: BBVA
Edition: Prime Yield

NPL ratio stabilizes at historically low levels

20 June, 2024

The significant increase in the cost of loans for families has raised fears of an increase in defaults. However, the data shows that non-performing loans (NPL) ratio is stable, remaining at historically low levels.

In the first four months of the year, €10.4 billion in new loans were granted to families, according to figures released by the Bank of Portugal. This value represents growth of over 17 per cent compared to last year and puts the volume of new financing at the highest level since 2003.

Unsurprisingly, the lion’s share of financing is for housing. Over the four months, almost €7.5 billion were financed in new operations, which represents an increase of 16 per cent compared to 2023 and corresponds to the best first four months since 2003.

It should be emphasised that these new operations include the credit transfers that many families decided to make, finding more attractive financing solutions at different banks. This in a period still marked by the impact of the sharp rise in interest rates seen throughout 2023.

Consumer credit, on the other hand, absorbed almost €2 billion in the first four months of the year, which represents a 10 per cent increase on last year.

It’s important to emphasise that throughout these months, the amount financed has fluctuated slightly, increasing and decreasing, with no consistent trend over the months.

In terms of housing loans, only 0.3 per cent of the total volume of loans granted is overdue, thus remaining at historically low levels. Only in February and March of this year did this ratio reach 0.2 per cent, a level it had never reached before. In April it rose slightly.

In total, there are 260.2 million euros in nonperforming home loans within the Portuguese banking system, a figure that represents a slight rise, but which keeps the level of household defaults at historic lows.

In the consumer credit and other purposes segment, defaults correspond to 2.7 per cent of the total financing granted, which also represents a slight increase compared to March (2.6 per cent),but corresponds to a low level considering the data since 2003.

Original Story: Doutor Finanças | Author: Sara Antunes
Translation and edition: Prime Yield

Banks sell bad loans for €8.2 billion to keep their balance sheets in check

19 June, 2024

The banks are facing a scenario of high interest rates in Spain with limited defaults, thanks to a good response from customers who are paying their debts and the transfer of the riskiest loans to non-regulated financial institutions. They sell them at a discount, but in return they get rid of some uncertainty and keep their balance sheet in check.

Last year, €17.7 billion worth of non-performing loans (NPLs) were sold in Spain, according to a report published today by Axis Corporate. The activity has been revived amid rising interest rates.

Of this amount, €8.2 billion was raised by traditional banks. There were two major transactions outside this regulated circuit: the sale of a €6 billion portfolio by the Norwegian multinational specialising in debt collection, Axactor, and the sale of a €2 billion portfolio owned by Blackstone and transferred to Cerberus.

Sareb, Santander and BBVA, among the most active

Within the regulated entities, Sareb – owned by the State through the Frob and several banks – sold NPLs to Axactor for 3 billion, integrated in a portfolio of NPLs called Victoria.

Other portfolio sales were carried out by Deutsche Bank to Cerberus for €1.6 billion and by Santander to several firms in four transactions for €1,707 million.

BBVA made three divestments for €830 million. These were, on the one hand, the Artemis portfolio, transferred to KKR, and, on the other, the Nairobi portfolio, which went to Cerberus and Kruk.

CaixaBank made two transactions valued at €645 million, one with Link and the other with Kruk, to divest a portfolio called Twister. Goldman Sachs sold a 350 million portfolio in Spain to Bank of America.

What is the distressed debt firm, as this type of company dedicated to problem assets is known, that has bought the most doubtful portfolios from banks? It is the US fund Cerberus, which has acquired portfolios valued at €4.51 billion.

Part of the result of all these movements is the low NPL ratio exhibited by Spanish banks. Santander, BBVA and Sabadell report ratios of between 3% and 3.5%, while CaixaBank, which is the most popular among retail customers in Spain, puts it below at 2.7%.

There are two banks in Spain, Ibercaja and Kutxabank, which have managed to bring their NPL ratio below 2%. The former stands at 1.6% and the latter at 1.2%.

Doubtful loans on banks’ balance sheets have fallen in Spain from 3.7% in 2022 to 2.75% in the second quarter of 2023, despite rate hikes and the fact that the unemployment rate is still the highest in Europe.

Original Story: La Vanguardia | Author: Iñaki de las Heras
Edition and translation: Prime Yield

Bankinter tries to sell loans valued at €550 million

12 June, 2024

Bankinter is looking to sell several loan packages collectively valued at around €550 million, joining other Spanish banks that are also shedding assets in an effort to lighten their balance sheets in the face of potential financial problems stemming from high interest rates.

Specifically, the Madrid-based bank is seeking buyers for a portfolio of non-performing loans (NPL) with a face value of more than €500 million and two smaller portfolios of NPL, people familiar with the matter told Bloomberg on condition of anonymity. The same sources added that Bankinter expects to complete the sale by the third quarter. According to the US agency, a Bankinter spokesman declined to comment on the deal.

Spanish banks are trying to shed billions in loans as higher interest rates threaten to take a toll on the economy and push more people into default. CaixaBank is also in the market with portfolios valued at around €1.1 billion, while BBVA sold a €500 million package last year.

Bankinter’s proposed deals are part of its ‘minimum NPL ratio strategy’ and are ‘a top priority’ this year, according to a marketing document accessed by Bloomberg. The large portfolio Bankinter is trying to sell consists of loans to 50,000 former credit card holders, according to the marketing document.

Bankinter’s consumer finance unit had a total of €4.7 billion in loans outstanding at the end of the first quarter, of which €1 billion was granted through debit and credit cards, according to a presentation to investors.

The second portfolio marketed by Bankinter contains mortgages secured by individuals and small businesses, and the third is made up of mortgages linked to multicurrency loans, some of which carry potential legal issues, according to the document seen by Bloomberg. The two packages have a combined face value of about €40 million.

Bankinter faces claims for its multicurrency loans that could cost it as much as €146 million, according to an estimate in its latest annual report. The bank has also made provisions of €77 million for legal proceedings for ‘usurious interest rates’ through its revolving credit cards and consumer loans.

Original Story: Cinco Dias | Author: Bloomberg
Edition and translation: Prime Yield

NPL sales to reach R$60 billion by 2024

10 June, 2024

In a country that can’t stop having less than 70 million people with their names on the books of SPC Brasil and Serasa, the volume negotiated in the NPL (Non Performing Loans) market, i.e. the sale of defaulted portfolios by ceding companies, is expected to reach R$60 billion by 2024.

And depending on the performance of the Desenrola Brasil programme (the non-payment of the instalments of the negotiated agreements), this figure could rise even further, with more defaulted portfolios possibly being put up for sale at the end of this year.

The sale of defaulted portfolios by ceding companies ended the first three months of the year with R$18 billion in credit made available.

According to a survey carried out by Recovery, an Itaú Group company that is a leader in credit recovery in Brazil, the figures for 2024 represent growth over the first quarter of 2022, when the balance available to the market was R$14.5 billion, an increase of 28%.

Recovery manages more than R$150 billion in defaulted loans and currently has more than 35 million clients with active debts. In other words, just over half the number of people registered with Serasa.

Also according to Serasa, of the total debts of delinquent consumers negatived in January this year, 59.7% (or 6 out of 10) were regularised or renegotiated within 60 days of the reference month.

The data comes from Serasa Experian’s Credit Recovery Indicator and also shows that accounts worth more than R$10,000 were the most successful, with 70.8 per cent of payments.

The number of defaulters in the country increased further in April 2024, compared to April 2023, and reached 68.76 million Brazilians.

The indicator carried out by the National Confederation of Shopkeepers (CNDL) and the Credit Protection Service (SPC Brasil) shows that four out of ten adult Brazilians (41.82 per cent) were in debt in April 2024.

And this greater indebtedness is also evident in micro-enterprises and MEIs. For example, the strong growth in productive microcredit combined with the increase in the number of informal entrepreneurs and the lack of financial knowledge can create a problem for those who wish to have their own business: debt.

In the last three years, up to December 2023, the number of loans released rose by 45% and, from December 2019 to the end of last year, the average value of the loans requested registered a real gain of 16.79%.

Original Story: JC Negócios – UOL | Author: Fernando Castilho
Edition and translation: Prime Yield

Loans to households at risk of default soar by almost 13 per cent

6 June, 2024

Bank credit granted to families that is classified by Portuguese banks as being in default or on the verge of default (failure to pay within the agreed period) soared by almost 13 per cent in 2023, one of the highest figures in recent years, indicates the Bank of Portugal (BdP) in the new Financial Stability Report, published this Tuesday. According to the analysis by the central bank governed by Mário Centeno, the problem is essentially concentrated among poorer or lower-income families, who are finding it increasingly difficult to honour their instalment payments to the bank.

This problem – referred to as ‘stage 2 credit risk categories’, i.e. those that are in the corridor of potential default (non-performing loans or NPLs, whose customers fail to pay, which also includes non-performing loans, loans that have been unpaid for more than 90 days) – is a growing problem and is causing concern among the BdP.

The increase in level 2 credit at risk affects the consumer segment proportionally more, but it is in housing loans that the situation has deteriorated the most, warns the BdP.

‘Although the total ratio of non-performing loans (NPLs) continued to fall in 2023, from 3 per cent to 2.7 per cent of total loans, the truth is that there seems to be a more serious problem brewing.

‘Across the main institutions, the ratio of loans to individuals in stage 2 increased by 2.2 percentage points (p.p.) to 10.4 per cent, revealing the vulnerability of lower-income families to tighter monetary conditions,’ warns Centeno’s institution.

Original Story: Diário de Notícias | Author: Luís Reis Ribeiro
Edition and translation: Prime Yield

Santander sells portfolio of large hotel loans to JP Morgan for €200m

5 June, 2024

Banco Santander has sold one of its most anticipated projects to JP Morgan. This is the Zeta project, which consists of loans to large clients in the hotel sector. The US company will pay around 200 million. The operation was carried out at a discount of one third, as the perimeter of the loans was worth 300 million.

According to El Confidencial, the Spanish group is thus removing the loans granted to hotels from its balance sheet. Although they are now up to date with their payments, they have all been in arrears for more than 90 days. In this way, it avoids future provisions on these loans and the need to deal with defaults.

Santander was advised by EY and A&O Shearman, while JP Morgan was advised by Colliers and Linklaters. Other funds such as Apollo, Starwood and Spanish group SVP also showed interest during the process. Santander’s NPL ratio stood at 3% in March 2024, down 19 basis points from a year earlier. The coverage ratio (provisions to NPLs) was 49.8%.

Santander also overtook BNP as the most capitalised bank in the European Union. This milestone came about because BNP Paribas’ share price on Tuesday discounted the dividend it will pay in the near future. When shares are quoted ex-dividend, there is always a downward adjustment in their value.

Original Story: El Confidencial | Author: Óscar Giménez
Edition and translation: Prime Yield